As rates on Guaranteed Investment Certificates (GICs) decline, pensioners and other income investors are searching for top Canadian dividend stocks to add to their self-directed Tax-Free Savings Account (TFSA).
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Enbridge
Enbridge (TSX: ENB) is up nearly 30% in the past year, but investors can still get a dividend yield of 6%.
The company continues to grow through a combination of acquisitions and organic projects. Enbridge spent US$14 billion to buy three natural gas utilities in the United States in 2024 and is working on $26 billion in capital projects. As new assets go into service, there should be adequate cash flow growth to drive additional dividend increases. Enbridge raised the distribution in each of the past 30 years.
Bank of Nova Scotia
Bank of Nova Scotia (TSX: BNS) is working through a transition that will see the bank invest more capital in the United States and Canada to drive growth while reducing its bets on Latin America, where the bank built up a large presence over the past 30 years.
It will take time for the strategy shift to deliver results, but investors get paid well to wait. At the time of writing, BNS stock provides a dividend yield of 6.1%.
Canadian Natural Resources
Canadian Natural Resources (TSX: CNQ) is an oil and natural gas producer with assets that span the full hydrocarbon spectrum. The company has a great track record of taking advantage of pullbacks in the energy sector to add assets at attractive prices. CNRL is also adept at moving capital around the portfolio to get the best returns. This is a big reason the board has been able to raise the distribution annually for the past 25 years. The stock is down over the past year due to the drop in oil prices. Investors who buy CNQ stock at the current price can get a dividend yield of 5.3%.
Fortis
Fortis (TSX: FTS) provides a smaller dividend yield than many other TSX stocks, but the company’s dividend growth and long-term total returns make up for the lower yield. Fortis has increased the dividend in each of the past 51 years. Management expects the $26 billion capital program to drive up the rate base from $29 billion in 2024 to $53 billion in 2029. The jump in cash flow should support planned annual dividend increases of 4-6% over that timeframe. The current yield is 3.8%.
TC Energy
TC Energy (TSX: TRP) spun off its oil pipelines business last year to focus on natural gas transmission and storage. The company also has power generation assets. Demand for natural gas is expected to rise in the coming years as tech companies build gas-fired power generation facilities to provide power for artificial intelligence data centres. TC Energy trades near its 12-month high but still offers a dividend yield close to 5%.
The bottom line on top TSX dividend stocks
Enbridge, Bank of Nova Scotia, CNRL, Fortis, and TC Energy all pay good dividends that should continue to grow. If you have some cash to put to work, these stocks deserve to be on your radar.
