Canadian income investors can take advantage of a pullback to add top TSX dividend stocks to a self-directed Tax-Free Savings Account (TFSA) portfolio.
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Fortis
Fortis (TSX: FTS) trades near $60.50 at the time of writing compared to more than $63 in November. The stock is still up 13.5% in the past year after catching a nice tailwind from falling interest rates in Canada and the United States.
Fortis is working on a $26 billion capital program through 2029 that is expected to boost the rate base from $38.8 billion to $53 billion. As new assets go into service, the company expects revenue and cash flow to rise enough to support planned dividend increases of 4% to 6% per year. Fortis raised the distribution in each of the past 51 years, so investors should be comfortable with the guidance.
At the current share price, investors can get a dividend yield of 4.1%.
Bank of Nova Scotia
Bank of Nova Scotia (TSX: BNS) is down to $74 from close to $80 in early December. The stock is still up 20% in the past year but sits well below the $93 it reached three years ago.
The bank is going through a strategy transition that will see Bank of Nova Scotia invest more growth capital in the United States and Canada in the coming years. At the same time, it is starting the process of selling some non-core assets in Latin America. Investors will need to be patient as they wait for improved returns, but you get paid a solid 5.7% dividend yield right now to wait.
Telus
Telus (TSX: T) is a contrarian pick today. The stock trades near $20 compared to $34 at one point in 2022. High interest rates and price wars have taken a toll on the large Canadian communications firms in the past two years, as debt expenses rose and margins shrunk.
Telus doesn’t have a media business, so it isn’t facing some of the same challenges as its main competitors, although its Telus Digital business has run into some revenue challenges.
At this point, the stock is probably oversold. Telus delivered decent results through the first three quarters of 2024 and raised the dividend for 2025. Investors who buy the stock at the current level can get a dividend yield of 7.9%.
Enbridge
Enbridge (TSX: ENB) trades for $64 per share at the time of writing. This is close to the recent high above $65.50, so there hasn’t been much of a pullback to jump on. In fact, Enbridge is up 27% in the past six months.
Despite the big rally, investors can still get a 5.9% dividend yield from ENB stock. The company is working on a $27 billion capital program to drive revenue growth, and it is positioned well to benefit from anticipated production growth in oil and natural gas in the United States and Canada. Enbridge raised the dividend in each of the past 30 years.
TC Energy
TC Energy (TSX: TRP) trades near $67.50 at the time of writing compared to the recent high of around $70. This stock has also had a nice run over the past six months. Looking ahead, TC Energy has two major pipeline projects that are expected to start commercial operation in 2025 and continues to work on its capital program that will see the company invest about $6 billion per year over the medium term.
TC Energy currently offers a dividend yield of 4.9%. The board has increased the payout annually for more than two decades.
The bottom line on TSX dividend stocks
Near-term volatility should be expected in the markets due to uncertainties around tariffs and interest rates. That being said, income investors might want to consider adding these stocks to their portfolios on the recent weakness and can use pullbacks to boost the positions.
