2 Dividend Stocks to Double Up on Right Now

These top dividend stocks pay attractive distributions.

| More on:
rising arrow with flames

Source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The TSX is near its record high, but investors can still find good Canadian dividend stocks trading at reasonable prices for a self-directed Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP) portfolio.

Fortis

Fortis (TSX:FTS) is a Canadian utility company with assets spread out across Canada, the United States, and the Caribbean.

Created with Highcharts 11.4.3Fortis PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

The stock is up about 15% over the past six months, largely driven by cuts to interest rates in Canada and the United States. Fortis uses debt to fund part of its growth initiatives. As interest rates soared in 2022 and 2023 investors sold the stock on concerns that higher debt expenses would cut into cash available for distributions. Elevated borrowing costs can also make some projects less attractive, which could reduce the growth outlook.

Now that the Bank of Canada and the U.S. Federal Reserve are cutting interest rates, investors are more optimistic about the outlook for utility stocks.

Fortis generates most of its revenue from rate-regulated businesses, including natural gas distribution, electricity transmission, and power generation. This means cash flow tends to be reliable and predictable, which is a good situation for investors who rely on Fortis for its steady dividend growth.

Fortis has increased the dividend in each of the past 51 years. The board plans to raise the dividend by 4% to 6% per year through at least 2029, supported by the current $26 billion capital program.

At the time of writing, investors can get a 3.9% dividend yield from Fortis.

Telus

Telus (TSX:T) is a contrarian pick today. The stock is down about 7% in 2024 compared to a gain of more than 20% for the TSX.

Revenue declines at its Telus Digital subsidiary have hindered the stock over the past two years. In addition, the core internet and wireless businesses have faced price wars and an uncertain regulatory environment.

Despite the headwinds, Telus continues to deliver stable results. The company reported an 11% increase in adjusted net income in the third quarter (Q3) of 2024. Telus has reduced staff by roughly 6,000 positions to streamline the business and reduce operating expenses. The company’s Telus Health division is performing well and has the potential to be a steady driver of growth in the coming years. Price wars in Canada might ease by the end of 2025 as providers start to focus more on margins.

Telus just raised its dividend for the second time in the past 12 months, extending its multi-year dividend-growth streak. The total dividend increase for the year is 7%.

Telus stock trades near $22.25 at the time of writing compared to $34 at one point in 2024. Investors who buy Telus at the current level can get a dividend yield of 7.25%.

The bottom line on top TSX dividend stocks

Fortis and Telus are good examples of top TSX dividend stocks with solid distributions that should continue to grow. If you have some cash to put to work in a self-directed TFSA or RRSP, these stocks deserve to be on your radar.

Should you invest $1,000 in Fortis right now?

Before you buy stock in Fortis, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Fortis wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $20,697.16!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 29 percentage points since 2013*.

See the Top Stocks * Returns as of 3/20/25

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

The Motley Fool recommends Fortis, TELUS, and Telus International. The Motley Fool has a disclosure policy. Fool contributor Andrew Walker has no position in any stock mentioned.

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Dividend Stocks

A train passes Morant's curve in Banff National Park in the Canadian Rockies.
Dividend Stocks

1 Practically Perfect Canadian Stock Down 24% to Buy Now and Hold for Life!

CNR stock is a top Canadian stock for investors, especially with shares down on the TSX today.

Read more »

Canada national flag waving in wind on clear day
Dividend Stocks

The Best Canadian Stocks to Buy Right Away With $30,000

If you have $30,000 you're willing to invest, these are some of the first Canadian stocks to consider on your…

Read more »

rail train
Dividend Stocks

What to Know About Canadian Pacific Railway Stock for 2025

CP stock has now gone through a major merger, so what do investors have to look forward to?

Read more »

ways to boost income
Dividend Stocks

Top Canadian Value Stocks I’d Buy for Dividend Growth and Appreciation

If you are looking for income and capital appreciation, here are three Canadian value stocks for a great total return…

Read more »

coins jump into piggy bank
Dividend Stocks

The Smartest Canadian Stock to Buy With $2,000 Right Now

The company’s powerful combination of growth, income, and value, positions it well to deliver solid returns, making it a smart…

Read more »

Transparent umbrella under heavy rain against water drops splash background. Rainy weather concept.
Dividend Stocks

This 10.6 Percent Dividend Stock Pays Cash Every Single Month

Are you looking to invest for a rainy day? This 10.6% dividend stock pays cash every month, irrespective of the…

Read more »

A worker gives a business presentation.
Dividend Stocks

Market Dip: Opportunity or Risk This April?

This market dip might have investors worried, but should they be excited instead?

Read more »

Blocks conceptualizing Canada's Tax Free Savings Account
Dividend Stocks

Why I’d Add This Top TSX Dividend Stock to My TFSA During the Current Dip

The market is full of volatility right now. Fortunately, this top TSX dividend trades at a discount and pays a…

Read more »