Canadian savers are using their self-directed Tax-Free Savings Account (TFSA) to build retirement portfolios that can provide steady passive income. Those who missed the big rebound in the TSX and have yet to allocate their $7,000 TFSA limit for 2025 are wondering which top Canadian dividend stocks still trade at reasonable prices and might be good to buy today.
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Enbridge
Enbridge (TSX: ENB) is a giant in the North American energy infrastructure industry with a current market capitalization of close to $137 billion.
The stock is up 28% in the past year, recovering all the losses it incurred in 2022 and 2023 when rising interest rates in Canada and the United States put pressure on pipeline stocks. Enbridge trades near $62.50 per share at the time of writing. It fell from $59 in 2022 to as low as $44 in late 2023. The rebound from that point started when the Bank of Canada and the U.S. Federal Reserve indicated they were done raising interest rates to fight inflation. The extra boost to the stock price came last year when the central banks began reducing interest rates.
Enbridge uses debt to fund part of its growth program. Projects can cost billions of dollars and sometimes take years to complete. Elevated debt expenses reduce profits and can cut into cash available for distributions. The reduction in borrowing costs over the past year has given investors renewed confidence in owning the stock.
Enbridge is working on a $28 billion capital program that will boost earnings and distributable cash flow in the next few years. This should support ongoing dividend growth. The board has increased the dividend annually for the past 30 years. Investors can buy ENB stock on a bit of a dip right now and get a 6% dividend yield.
Bank of Nova Scotia
Bank of Nova Scotia (TSX: BNS) trades near $74 at the time of writing. The stock is up about $10 per share in the past two months, but remains below the $80 it reached late last year and the $93 it hit in early 2022 at the top of the post-pandemic bank rally.
Bank of Nova Scotia is working through a transition strategy to drive improved shareholder returns. The bank’s growth focus is now on the United States and Canada, instead of Latin America where big bets over the past 20 to 30 years have not delivered the anticipated results for investors.
Bank of Nova Scotia spent US$2.8 billion in 2024 to take a 14.9% stake in KeyCorp, an American regional bank. The deal provides the Bank of Nova Scotia with a good platform to expand its presence in the American market. On the Latin America side, Bank of Nova Scotia sold its operations in Colombia, Costa Rica, and Panama earlier this year. The bank booked a loss of more than $1.3 billion on the transaction, which is likely why the stock fell in the first few months of 2025.
It will take time for the turnaround plan to deliver results, but investors can pick up the stock at a discounted price right now and get a dividend yield near 6%.
The bottom line
Enbridge and Bank of Nova Scotia 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.
