Market corrections are tough to watch, but they also provide Canadian investors with opportunities to buy top dividend stocks at discounted prices for a self-directed Registered Retirement Savings Plan (RRSP) portfolio.
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TC Energy
TC Energy (TSX: TRP) trades near $63 at the time of writing. The stock is down about 10% in the past week after a nice recovery that occurred over the past year.
TC Energy has refocused its strategy to concentrate on natural gas storage and transmission and power generation. The company spun off its oil pipelines business in 2024 as part of a broader effort to reduce debt and shore up the balance sheet to move ahead with the growth program.
TC Energy ran into some troubles with its 670km Coastal GasLink project that saw its budget more than double to about $14.5 billion. The company had to take on extra debt to complete the pipeline, but management did a good job over the past two years of monetizing non-core assets to cover the hit. Commercial operation of Coastal GasLink is ramping up in 2025 as the pipeline prepares to transport natural gas from Canadian producers to the new LNG Canada liquified natural gas export facility on the coast of British Columbia.
TC Energy recently completed another major pipeline project in Mexico. The 715 km Southeast Gateway pipeline came in under budget and will also go into commercial service in 2025. Revenue contributions from Coastal GasLink and Southeast Gateway should help support ongoing dividend growth.
TC Energy’s ongoing capital program will see the company invest roughly $6 billion annually over the medium term to drive additional cash flow growth. The board has increased the dividend annually for more than two decades. Investors who buy TRP stock at the current level can get a dividend yield of 5.4%.
Bank of Montreal
Bank of Montreal (TSX: BMO) trades near $123 per share at the time of writing. The stock is down about 11% in 2025 and was as high as $150 in February before markets started to get concerned about a potential global trade war.
Bank of Montreal has a significant American business that it built through strategic acquisitions over the past 40 years. The largest and most recent deal was the US$16.3 billion purchase of California-based Bank of the West in 2023. Things have been a bit turbulent in the past two years as the bank had to boost provisions for credit losses, but the long-term benefit of the additional 500 branches and 1.8 million customers should help drive long-term growth.
Bank stocks might see more downside in the coming months. A global trade war could push the U.S. and Canadian economies into a recession. At the same time, tariffs could drive up inflation, which will make it harder for the central banks to cut interest rates to stimulate economic activity. In a situation where unemployment rises and interest rates remain high, Bank of Montreal and its peers could see more pain from borrowers with too much debt.
A good chunk of the negative outlook is likely already priced into BMO stock at this point. Contrarian investors who like the long-term outlook can get a 5.1% yield right now while they wait for a rebound. Bank of Montreal paid its first dividend nearly 200 years ago and has given investors a share of the profits every year since.
The bottom line on top stocks for RRSP investors
Near-term volatility is expected, but TC Energy and Bank of Montreal pay good dividends that should continue to grow. If you have some RRSP money to put to work, these stocks deserve to be on your radar.
