Retirees and other income investors are wondering which TSX dividend stocks might still be good to buy right now for a self-directed Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP) focused on high yields and distribution growth.
Many leading names in the TSX already trade near record highs, but there are a few contrarian picks in the market today that trade at discounted prices.
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Telus
Telus (TSX: T) trades below $22 per share at the time of writing, compared to $34 three years ago.
Rising interest rates in Canada in 2022 and 2023 caused most of the damage over that timeframe. Telus uses a lot of debt to fund its capital program, which includes wireline and wireless network upgrades and expansion. The jump in debt expenses on variable-rate loans had an immediate impact on profits. It also reduced cash available for dividends or debt reduction. The jump in bond yields that occurred as bond prices fell made it more expensive to raise funds to replace bonds that were coming due or to access new cash for capital investments.
In late 2023, the central bank indicated it was done raising interest rates in its fight against inflation. At that point, many stocks that are sensitive to interest rate changes started to recover. They then picked up a tailwind when the Bank of Canada cut rates in the second half of last year.
Telus and most other communications stocks, however, missed the party in 2024. Price wars for mobile and internet subscriptions cut into margins. Telus also took a hit from its Telus Digital (formerly Telus International) subsidiary, which saw revenues plunge. Regulatory uncertainty and reductions in immigration have also had an impact.
As a result, Telus traded as low as $19 at the end of last year.
The stock recovered some losses so far in 2025 as bargain hunters bet the worst is over for the business. Telus reported solid first-quarter 2025 earnings and raised the dividend 7% for 2025. Prices for mobile plans are rising again, and Telus is taking Telus Digital private. Management is providing decent financial guidance for 2025, even in the uncertain market conditions.
Investors who buy Telus at the current level can get a dividend yield of 7.6%.
Bank of Nova Scotia
Bank of Nova Scotia (TSX: BNS) trades near $74.50 at the time of writing. The stock has been on a wild ride over the past year, rising from $61 in early July to as high as $80 in late November before going into a steep pullback that saw BNS stock fall back to $63 in April. Financial stocks bounced in the past two months after the tariff-induced market shock.
Bank of Nova Scotia is working through a turnaround plan that will see the bank invest more capital in the United States and Canada to drive growth. Previously, the bank made big bets on Latin America, where it still has large operations in Mexico, Peru, and Chile. Bank of Nova Scotia sold its businesses in Colombia, Costa Rica, and Panama earlier this year.
It will take time for the new strategy to deliver results, but patient investors can buy BNS stock at a reasonable price today and get paid a 5.9% dividend yield to wait for the recovery.
The bottom line
Telus and Bank of Nova Scotia are arguably contrarian investments right now, but the companies pay good dividends, and there should be decent upside potential. If you have some cash to put to work in an income portfolio, these stocks deserve to be on your radar.
