The stock market is in a state of volatility after a good start to the year. The tariff war that followed Donald Trump’s inauguration has led to global trade tensions and plenty of uncertainty.
Many investors missed out on an opportunity to take advantage of the rally in the stock market last year. After the current dip, plenty of high-quality dividend stocks are available at lower share prices.
Buying the dip takes a stronger stomach due to the additional downside potential but can pay off well in the long run. Allocating capital to high-quality stocks that can deliver growth through capital gains in recovery and dividends can help you grow your wealth.
Against this backdrop, here are two TSX dividend stocks I’d consider adding to my holdings to lock in inflated dividend yields and give myself a shot at decent capital gains on a rebound.
Toronto-Dominion Bank
Toronto-Dominion Bank (TSX:TD) is a giant in the Canadian financial services sector. The $146.66 billion market-cap bank is one of the two largest Canadian banks. Besides a dominating presence in the Canadian banking sector, it also has substantial banking operations across the border in the United States. After the completion of its acquisition of a 13% ownership stake in Charles Schwab, it has a more prominent presence in the U.S. from Maine to Florida and the Northeast.
The bank sector declined amid aggressive interest rate hikes between 2022 and 2023, but central banks in Canada and the U.S. sparked an uptick after interest rate cuts last year. Lower borrowing costs improved business and introduced a much-needed tailwind for Canadian banks. The ongoing uncertainty has led to a decline in share prices and another opportunity for investors who missed the last dip.
As of this writing, TD stock trades for $83.80 per share and boasts a juicy 5.01% dividend yield that you can lock into your portfolio today. At current levels, TD stock also trades at a 4.76% discount from its 52-week high.
Enbridge
Enbridge (TSX:ENB) is a giant in another industry: The energy sector. This TSX energy stock is another excellent pick for investors seeking reliable dividend income and capital gains amid market volatility. The Calgary-headquartered $134.90 billion market-cap company is an energy infrastructure company that transports and distributes energy products through an extensive network across North America.
Besides a pipeline transporting traditional energy products, Enbridge also has growing renewable energy operations, and it boasts one of the largest natural gas utility businesses in the continent under its belt. Its diversified revenue streams and low-risk business model have allowed Enbridge stock to increase its payouts to investors for over three decades.
As of this writing, Enbridge stock trades for $61.91 per share. Down by 5.65% from its 52-week high, it boasts an inflated 6.09% dividend yield that you can lock into your portfolio today.
Foolish takeaway
ENB stock and TD stock are giants on the TSX that pay good dividends and have a reliable track record. If you have $10,000 to put to work in the stock market, I’d suggest you allocate at least a portion of it to these two stocks as solid foundations for a strong dividend income portfolio with capital gain potential.
