The TSX recently hit a new record high, but some top Canadian dividend stocks still trade at discounted prices and offer attractive yields for investors seeking income inside their self-directed Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP) portfolios.
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Telus
Telus (TSX:T) trades near $22 at the time of writing. The stock is up from the 12-month low of around $19 but is way off the $34 it fetched three years ago.
Rising interest rates in 2022 and 2023 caused most of the initial weakness. Telus uses debt to fund part of its capital program, which includes upgrading and expanding the wireline and wireless communication networks. The Bank of Canada started to reduce interest rates in the second half of last year, but other issues prevented Telus from participating in the market rebound.
Competition in the mobile and internet sectors put pressure on margins last year. Telus also saw revenue slide at its Telus Digital (formerly Telus International) subsidiary. Headwinds remain for the communications sector in Canada. A drop in the number of international students and immigrants will impact phone sales and subscription growth for mobile plans.
That being said, most of the bad news is likely priced into the share price at this point. Prices for mobile plans have moved higher in 2025 as providers look to mend margins. Telus Digital appears to be stabilizing.
Telus actually reported solid first-quarter (Q1) 2025 results despite the challenging environment. The board raised the dividend by 7%, and Telus says it plans to increase the distribution by 3% to 8% per year through 2028, supported by anticipated growth in adjusted earnings before interest, taxes, depreciation, and amortization. Telus Health and Telus Agriculture and Consumer Goods, two other subsidiaries, continue to grow revenue at double-digit rates.
Investors who buy Telus stock at the current level can get a dividend yield of 7.5%.
Canadian Natural Resources
Canadian Natural Resources (TSX:CNQ) raised its dividend twice in 2024 and once already in 2025, extending the annual dividend-growth streak to 25 years. The company reported record production levels in Q1 2025 and is benefitting from high natural gas prices.
CNRL’s share price, however, trades near $43 at the time of writing, compared to the 12-month high of around $53. Weak oil prices are to blame for the pullback. Rising production in the United States, Canada, and some other countries combined with weak demand in China put pressure on the oil market last year. Recession fears triggered by trade wars are providing a headwind so far in 2025. Analysts widely expect the oil market to remain in a surplus position through 2025 and into next year, but a major geopolitical event in the Middle East could quickly send oil prices soaring.
CNRL remains very profitable at current oil prices and is benefitting from its recent US$6.5 billion purchase of Chevron’s Canadian assets. Investors who buy CNQ stock at the current level can get a dividend yield of 5.5%.
The bottom line
Telus and CNRL pay attractive dividends that should continue to grow. If you have some cash to put to work, these stocks deserve to be on your radar.
