Canadian seniors and other dividend investors are searching for top TSX dividend stocks to add to their self-directed Tax-Free Savings Account (TSFA) focused on generating passive income.
The rally in the Canadian market to an all-time high has driven down dividend yields, but some top TSX stocks have not rebounded yet, while others still offer attractive returns.
Canadian Natural Resources
Canadian Natural Resources (TSX:CNQ) is Canada’s largest energy company, with a current market capitalization of nearly $89 billion. Assets span the range of the hydrocarbon spectrum, including oil sands, conventional light oil, conventional heavy oil, offshore oil, natural gas liquids, and natural gas. CNRL tends to be the sole or majority owner of its assets, so it has the flexibility to quickly move capital around the portfolio to take advantage of the best opportunities in the market as commodity prices change.
The mix between oil and natural gas, along with a strong balance sheet and capital flexibility, are the reasons the board has been able to raise the dividend in each of the past 25 years. This is a solid track record for a business that relies on commodity markets to determine margins.
CNRL isn’t afraid to use its financial firepower to make big strategic acquisitions to drive growth. The most recent transaction was the US$6.5 billion takeover of Chevron’s Canadian assets last year. The deal added significant reserves and is giving CNRL a good revenue boost to help offset weak oil prices. CNRL reported record production for the first quarter (Q1) of 2025.
The stock is down 19% in the past year, currently trading near $42.50 per share. That’s off the recent low of around $36 but still looks attractive, even if oil prices face near-term headwinds. Buy-and-hold energy investors can get a solid 5.5% dividend yield from CNQ right now while they wait for the next rally in the oil market.
Enbridge
Enbridge (TSX:ENB) is up 26% in the past year, so the easy money has likely already been made, but the stock still offers a 6% dividend yield at the current share price near $63.
The energy infrastructure giant is one of Canada’s largest companies, with a current market capitalization of nearly $138 billion. Acquisitions and a massive capital program continue to drive revenue and cash flow growth. Enbridge spent US$14 billion to acquire three American natural gas utilities last year. In addition, the company is working on a $28 billion capital program that will help increase adjusted earnings per share (EPS) by 4% and distributable cash flow (DCF) by 3% through 2026. Beyond that timeframe, adjusted EPS and DCF should grow at an annual rate of 5%. This should support steady dividend increases. Enbridge raised the payout in each of the past 30 years.
Interest rate cuts in the second half of 2024 fuelled the recent leg of the stock’s rally. Analysts widely expect rates to continue to trend lower as long as there isn’t an inflation spike caused by tariffs.
The bottom line
CNRL and Enbridge are good examples of top Canadian dividend-growth stocks that offer high yields. If you have some cash to put to work in a portfolio focused on passive income, these stocks deserve to be on your radar.
