Retirees and other dividend investors are wondering which TSX stocks are potentially undervalued right now after recent pullbacks and are good to buy for a self-directed Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP) portfolio.
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Bank of Nova Scotia
Bank of Nova Scotia (TSX: BNS) trades near $72 at the time of writing compared to nearly $80 in early December.
The dip gives investors who missed the rally last fall a chance to pick up a solid 5.9% dividend yield on BNS stock.
Bank of Nova Scotia is working through a transition that will see growth investments focus on the United States and Canada in the coming years. The new chief executive officer (CEO) has also started the process of selling assets in Latin America, where the bank has invested heavily over the past three decades.
It will take time for the turnaround efforts to deliver results, but investors get paid well to wait.
Fortis
Fortis (TSX: FTS) trades near $62 per share at the time of writing. This isn’t far off the 12-month high, around $64, but the stock should continue to benefit from some tailwinds in the next couple of years.
Falling interest rates will free up more cash for distributions. Fortis also has a $26 billion capital program on the go to drive revenue and cash flow higher. Management plans to boost the dividend by 4% to 6% per year through 2029. Investors who buy FTS stock at the current level can get a dividend yield of 4%.
Enbridge
Enbridge (TSX: ENB) has a $26 billion development program underway and is also growing through acquisitions. The combination of the two drivers of revenue growth should support steady dividend increases. Enbridge raised the dividend in each of the past 30 years.
The stock is down to $59.50 at the time of writing compared to a recent high above $65. Investors who buy at the current level can get a dividend yield of 6.3%.
Telus
Telus (TSX: T) recently reported decent Q4 2024 results despite facing a number of challenges in the Canadian communications sector.
Price wars, high interest rates, reduced immigration, and regulatory uncertainty have contributed to the decline in the stock. Headwinds are expected to persist, but most of the negative news is probably already reflected in the share price. Investors who buy Telus stock at the current level can get a 7.4% dividend yield.
Canadian Natural Resources
Canadian Natural Resources (TSX: CNQ) raised its dividend in each of the past 25 years. That’s a great track record for an oil and gas producer. The company continues to expand through acquisitions to drive production growth and boost reserves. Recently completed oil and gas pipelines running to export facilities in British Columbia should help Canadian energy producers sell more products at higher prices to international buyers.
CNRL’s share price is down to $43 at the time of writing from $56 last year. Investors can now get a 5.2% dividend yield from CNQ stock.
The bottom line on top TSX dividend stocks
Bank of Nova Scotia, Fortis, Enbridge, Telus, and CNRL pay attractive dividends that should continue to grow. If you have some cash to put to work, these stocks deserve to be on your radar.
