Canadian savers are searching for good stocks to buy for their self-directed Registered Retirement Savings Plan (RRSP) portfolios focused on dividends and total returns.
With the TSX near its record high and tariff uncertainty expected to provide ongoing volatility in the coming months, it makes sense to consider established companies with strong businesses that can ride out market turbulence.
Canadian National Railway
Canadian National Railway (TSX:CNR) increased its dividend in each of the past 25 years. The company also returns cash to shareholders through stock repurchases. In fact, the current share buyback plan will see CN repurchase and cancel up to 20 million shares of the common stock float to February 2026.
CN’s share price is down about 17% in the past year. This gives investors an opportunity to buy CNR stock on a meaningful pullback at a time when many TSX stocks are near 12-month highs.
Labour strikes at both CN and key ports, along with delays due to wildfires in Alberta, caused most of the pain in 2024. Wildfire risks are not going to go away, but the labour disputes should be done for the next few years. The extension of the decline in the share price in 2025 can be attributed to concerns that U.S. tariffs will trigger a recession in Canada, the United States, and the broader global economy. A significant economic slowdown would impact demand for CN’s services. The company carries 300 million tons of cargo across its 20,000 route-mile rail network that connects ports on the Pacific and Atlantic coasts of Canada to the Gulf coast of the United States.
Near-term volatility is expected, but trade deals will get done, and economic growth will continue. CN actually expects to generate adjusted earnings-per-share (EPS) growth of 10% to 15% in 2025, even in this environment. Assuming the company hits the target, the stock might be oversold at this point.
TD Bank
TD Bank (TSX:TD) had a rough year in 2024 due to issues in its U.S. business. American regulators put an asset cap on TD’s U.S. operations and hit the bank with fines of more than US$3 billion for not having adequate systems in place to prevent money laundering at some of the U.S. branches.
In 2025, the stock is on the rebound under the new CEO, who took control in February. TD sold its remaining stake in Charles Schwab for proceeds of about $20 billion. The bank is using $8 billion to buy back stock and will allocate the remaining funds to drive organic growth in Canada, along with funding other initiatives.
TD just reported solid fiscal second-quarter (Q2) 2025 financial results that topped analyst expectations. Provisions for credit losses (PCL), however, continue to be high, so investors need to keep an eye on the economy. A recession could trigger a spike in unemployment in Canada and the United States, which would potentially drive higher PCL at TD and its peers. TD is trimming its staff count by 2%, or about 2,000 positions, as part of a restructuring as it works out a new growth strategy while the U.S. operations remain under the asset cap. The American market has been a core driver of growth for TD over the past two decades.
TD remains very profitable and has the capital to ride out market turbulence. At the current price of nearly $93, the stock remains well below the $108 it reached in 2022. Investors who buy TD at the current level can get a dividend yield of 4.5%.
The bottom line on top stocks for RRSP investors
CN and TD trade at reasonable prices and should deliver solid dividend growth over the coming years. If you have some cash to put to work in a self-directed RRSP, these stocks deserve to be on your radar.
