With the TSX near its all-time high, investors are wondering which Canadian stocks might still be good to buy right now for a self-directed Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP) portfolio focused on income and long-term capital gains.
One strategy in the current market conditions would be to buy quality dividend-growth stocks and stocks that are industry leaders, but might be out of favour right now due to sector weakness.
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Canadian National Railway
Canadian National Railway (TSX:CNR) trades near $140 per share at the time of writing compared to a high of $170 in the past year. The pullback gives investors a chance to buy CNR at a decent discount.
Investors are concerned that elevated interest rates, a trade war between the U.S. and its neighbours, and tariffs on goods entering the United States will cause a recession in the U.S. and Canada, as well as around the globe. This would put pressure on demand for CN’s services.
Near-term weakness could persist until there is more clarity on the outcome of trade negotiations. However, the board still raised the dividend by 5% for 2025, marking the 29th consecutive annual increase. Buying CN on big dips has historically proven to be a savvy move for patient investors.
Canadian Natural Resources
Canadian Natural Resources (TSX:CNQ) is another industry leader that trades well below its 12-month high. The stock picked up a new tailwind in recent weeks on higher oil prices, rising from $36 in April to the current price near $46, but it is still off the $52 it fetched in October.
The board has increased the dividend for 25 consecutive years. Investors who buy CNQ stock at the current level can get a dividend yield of 5.1%. If oil spikes on further geopolitical risk, this stock could soar.
Enbridge
Enbridge (TSX) is up 29% in the past year, but the stock is off its recent high, so investors can use the dip to start a position in the energy infrastructure giant.
The company is a key player in the energy market, moving roughly 30% of the oil produced in Canada and the United States and 20% of the natural gas used by U.S. homes and businesses. The current $28 billion capital program should boost earnings over the next few years to support steady dividend increases. Enbridge raised the dividend in each of the past 30 years. At the current price, investors can get a dividend yield of 6.1%.
Bank of Nova Scotia
Bank of Nova Scotia (TSX:BNS) trades near $74.50 at the time of writing. The stock was as high as $93 in early 2022 before going into an extended slide that saw it drop as low as $55 in late 2023. Bank of Nova Scotia is working on a turnaround plan that will see it focus more growth investments on the United States and Canada as it sells assets in Latin America where it made big bets over the past 20 to 30 years.
Investors will need to be patient, but you collect a decent 5.9% dividend yield right now while you wait.
Fortis
Fortis (TSX:FTS) is a good stock to own if you don’t want to worry about watching the market gyrations every week. The utility company generates reliable and predictable rate-regulated revenue. Fortis is working on a $26 billion capital program to drive earnings growth over the next five years. This should support planned annual dividend increases of 4% to 6% through 2029. Fortis raised the dividend in each of the past 51 years.
The bottom line
CN, CNRL, Enbridge, Bank of Nova Scotia, and Fortis pay good dividends that should continue to grow. If you have some cash to put to work, these stocks deserve to be on your radar.
