Canadian dividend investors have plenty of yield-heavy options as we approach the middle of July and the peak summer season. Undoubtedly, the TSX Index is running hot, but after President Donald Trump’s latest tariff threats (of 35%), the TSX could run out of steam and sit on the sidelines, even as the S&P 500 and Nasdaq 100 indices continue to proceed higher. Indeed, it’s a frustrating time for some Canadian investors exposed to those tariff-sensitive plays.
But given the market’s resilience and the fact that Canada wants to play ball (they pulled back on the DST (Digital Services Tax) to resume negotiations with the U.S.), I do think that investors probably shouldn’t opt to sell now as they plan to buy into weakness. It’s hard to tell when the next correction will hit or if the 35% tariff will even see the light of day come the start of August.
Indeed, the can may be kicked further down the road, or we may get a surprise deal that sets the TSX Index up very well for a strong finish to 2025. In any case, timing the market or trying to predict things is never a good idea for new investors. Instead, it pays literal dividends to go for the undervalued names on weakness as you aim to hold them for years at a time before their full worth is recognized by most other investors. Here are two dividend-paying names I like for the next five to eight years (and even beyond):
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Nutrien
First up, we have a fertilizer-producing top dog in Nutrien (TSX:NTR), which sports a nice 3.8% yield at the time of writing. And while the stock received another downgrade (to Hold from Buy), this time courtesy of Jefferies. Indeed, there may be a lack of catalysts ahead, and the potential for fertilizer prices to retreat a bit. And while Nutrien can’t control which direction potash (and other agricultural commodity) prices move over the short term, I do think the firm is excelling at driving down costs of production and riding out periods of industry stagnation.
Despite the recent downgrades and calls for more muted upside, I remain a bull for the soaring global population that calls for higher crop yields. While the $40 billion producer may get a bit choppier from here (1.2 beta, which entails more volatility than the TSX Index on average), I think any dips will be more than worth buying for the long haul. Shares are still down around 40% and offer plenty of bang for the buck.
BCE
BCE (TSX:BCE) disappointed many income investors when it reduced its payout, but with a more sustainable 5.8%-yielding dividend, I do think it’s time for value hunters to get back into the name on recent strength. Sure, the latest 9% pop off recent lows may be dwarfed by the nearly 60% implosion that preceded it. Simply put, BCE is profoundly unloved, but may be in for a considerable relief bounce at some point over the next couple of years.
But with deep value to be had and a massive valuation “reset” now in the books, it may not take much to send shares rocketing higher again. Additionally, I think the AI data centre initiative (Bell AI Fabric) is quite intriguing and could eventually grow into a nice business that helps nudge BCE to its former glory. In the meantime, look for the fibre-first move and cost cuts to help BCE gain ground as the telecom improves the state of its balance sheet.
