The rally in the TSX this year eliminated many of the really good deals, but several top Canadian dividend stocks still offer attractive yields and should be solid picks for a self-directed Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP) focused on passive income and total returns.
Fortis
Fortis (TSX:FTS) recently raised its dividend by 4.2%. This marks the 51st consecutive annual dividend hike by the board.
More increases are planned through 2029. Fortis intends to boost the distribution by 4% to 6% annually over five years, supported by the $26 billion capital program. Investors who buy Fortis stock at the current level can get a dividend yield of 3.95%.
Canadian Natural Resources
Canadian Natural Resources (TSX:CNQ) just raised its dividend by 7%. This is the 25th consecutive annual increase to the distribution. That’s a great track record for a business that relies on commodity prices to determine revenue.
The oil and gas producer is a giant in the Canadian energy sector and continues to make acquisitions to drive revenue growth and boost the reserves. The stock is down to $48 from $56 earlier this year. Investors who buy CNQ stock at the current price can get a dividend yield of 4.7%.
TD Bank
TD (TSX:TD) is a contrarian pick right now. The stock has underperformed its peers in 2024 due to troubles in the American operations. Regulators in the U.S. hit TD with fines of roughly US$3 billion for not having proper systems in place to identify and prevent money laundering at some branches. A cap has also been placed on TD’s U.S. assets. This puts the growth strategy in the U.S. on hold.
It will take some time for TD to get back on track, but the stock might be oversold at this level. Despite the challenges, TD remains a very profitable bank, and investors can currently get a 5.15% dividend yield on the stock.
Enbridge
Enbridge (TSX:ENB) just raised its dividend by 3%. This is the 30th consecutive year the board has increased the distribution. Enbridge wrapped up its US$14 billion acquisition of three natural gas utilities in the United States this year and is working on a $27 billion capital program. As new assets are completed and go into service, the company should see cash flow rise to support dividend growth. Investors who buy ENB stock at the current price can get a dividend yield of 6.2%.
Telus
Telus (TSX:T) is another contrarian pick. The stock is down 7% in 2024 compared to a gain of more than 20% for the TSX. Price wars in the mobile market, regulatory uncertainty, and challenges at its Telus Digital subsidiary have contributed to the pullback. Market conditions might remain challenging over the near term, but Telus generates good cash flow and continues to deliver dividend growth. At the time of writing, the stock offers a dividend yield of 7.3%.
The bottom line on top TSX dividend stocks
Fortis, CNRL, TD, Enbridge, and Telus all pay attractive dividends that should continue to grow. If you have some cash to put to work in a buy-and-hold portfolio focused on dividends, these stocks deserve to be on your radar.
