The Registered Retirement Savings Plan (RRSP) is invaluable for Canadians looking to build a solid retirement nest egg. Contributions to an RRSP offer immediate tax advantages and a tax-sheltered environment for your investments to grow.
With 2025 now upon us, I think it’s a great time to consider where to strategically allocate your next $5,000. Here are two top-performing TSX stocks that align with long-term growth and income stability which I think are worth considering for their defensive attributes as well as their dividend income.
Suncor Energy
Suncor Energy (TSX:SU) is a Canadian integrated energy company involved in oil sand operations, refining, and retail. As one of the largest players in Canada’s energy industry, Suncor has a diversified business model that supports resilience and profitability across economic cycles.
The global energy sector is poised for sustained growth as demand for oil and gas continues to rebound post-pandemic. Suncor, with its strong production capabilities and cost-efficient operations, is well-positioned to capitalize on rising energy prices in 2025 and beyond. In addition, Suncor has demonstrated improved profitability through disciplined cost management and increased production efficiency. Its robust cash flows have enabled the company to pay down debt, repurchase shares, and increase dividends.
Suncor offers an attractive dividend yield of around 4.5%. The company has a solid track record of returning capital to shareholders through consistent dividends and share buybacks, making it a reliable choice for RRSP investors. Allocating $2,500 of your $5,000 RRSP investment to Suncor provides exposure to the growth potential of the energy sector while benefiting from a steady income stream through its dividends.
Fortis
Fortis (TSX:FTS) is one of largest utility companies in Canada, with operations spanning electricity and natural gas distribution across North America. Known for its defensive characteristics, Fortis is an excellent choice for RRSP investors seeking stability and reliable returns.
Fortis operates in a highly regulated industry, ensuring predictable cash flows and earnings regardless of economic conditions. As a provider of essential services like electricity and gas, Fortis is insulated from market volatility, making it a cornerstone for any retirement portfolio. FTS stock is a Dividend Aristocrat, boasting nearly 50 consecutive years of dividend increases. With a current yield of approximately 4%, Fortis plans to grow dividends by 4–6% annually, ensuring consistent income growth for RRSP investors.
Fortis is actively transitioning toward renewable energy sources, with plans to invest billions in clean energy projects and grid modernization. This positions the company for long-term growth while aligning with global sustainability goals. Allocating the remaining $2,500 of your RRSP investment to Fortis ensures a steady income stream through its growing dividends while adding a low-risk component to your portfolio.
