Pensioners and other dividend investors are wondering which TSX stocks should be on their watch lists for a self-directed Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP) portfolio.
Buying great dividend-growth stocks on dips takes courage and requires patience to ride out turbulence, but it also helps boost yields and can drive better portfolio returns over the long run.
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Enbridge
Enbridge (TSX:ENB) trades near $62 per share at the time of writing. The stock is bouncing back after a dip below $60 last month but remains off the 12-month high above $65.
With a current market capitalization of nearly $135 billion, Enbridge is a major player in the North American energy infrastructure industry. The company moves roughly 30% of the oil produced in Canada and the United States and transports about 20% of the natural gas used by American homes and businesses. Investments in recent years have focused on growing U.S. assets. This includes the US$14 billion purchase of three natural gas utilities in 2024, along with the previous acquisition of an oil export terminal in Texas and a renewable energy developer.
Natural gas demand is expected to grow in the coming years as tech companies build gas-fired power generation facilities to provide electricity for new artificial intelligence data centres. Energy exports are also expected to rise as international buyers seek out reliable supplies of oil and liquified natural gas.
Enbridge completed $5 billion in capital projects in 2024 and sanctioned another $8 billion for development. The current secured capital program is about $26 billion. This will help drive ongoing revenue and cash flow expansion to support the dividend. Enbridge increased the distribution in each of the past 30 years. Investors who buy ENB stock at the current level can get a 6% dividend yield.
Fortis
Fortis (TSX:FTS) trades near $64.50 at the time of writing. The stock moved higher over the past two months after a late 2024 pullback that saw the share price dip to $58.
Fortis operates power generation facilities, electricity transmission networks, and natural gas distribution utilities in Canada, the United States, and the Caribbean. As with Enbridge, expansion comes through a combination of acquisitions and internal development projects, although Fortis hasn’t made a significant purchase in several years.
Organic growth remains robust. Fortis has a $26 billion capital plan in place for 2025 to 2029. The company completed roughly $5 billion in projects in 2024. As the new assets go into service, Fortis expects the rate base to expand from $39 billion in 2024 to $53 billion in 2029. This should support ongoing dividend expansion in the range of 4-6% per year. Fortis has increased the distribution annually for more than five decades.
Investors who buy FTS stock at the current level can pick up a dividend yield of 3.8%. This is lower than the yield available on other stocks, but the steady dividend growth will boost the yield on the initial investment in the coming years.
The bottom line on top TSX dividend stocks
Enbridge and Fortis have great track records of dividend growth and should continue to raise their payouts in the coming years. If you have some cash to put to work, these stocks deserve to be on your radar when the market dips.
