Canadian savers are searching for good dividend-growth stocks to add to their self-directed Registered Retirement Savings Plan (RRSP) portfolios focused on total returns. Buying top stocks on dips requires some courage, but the strategy enables investors to pick up a higher dividend yield while positioning for capital gains on the next rally.
Source: Getty Images
Canadian Natural Resources
Canadian Natural Resources (TSX: CNQ) trades near $42.50 at the time of writing, compared to $55 at one point last year. Investors who buy CNQ stock at the current level can pick up a dividend yield of 5.5%.
CNRL is a major player in the Canadian oil and natural gas sector. The company has assets that span the commodity spectrum, including oil sands, conventional heavy oil, conventional light oil, offshore oil, natural gas liquids, and natural gas production. It also owns some strategic pipeline infrastructure in key natural gas areas.
The opening of the Trans Mountain expansion last year provided Canadian oil producers with new access to the Pacific coast to sell to international buyers. As Canada looks to pivot away from the United States, new oil and natural gas pipelines running to the Pacific, Atlantic, and Arctic could be on the way. This would benefit CNRL at its domestic production operations as demand for Canadian oil and natural gas is expected to rise in the coming years.
International buyers are keen on securing reliable supplies from stable countries to meet their energy needs. New access to global markets through export facilities will help CNRL and its peers get better pricing for the commodities than they currently receive when selling to the United States.
CNRL has a strong balance sheet that enables the board to raise the dividend steadily, even during challenging market conditions. In fact, the company has increased the payout for 25 consecutive years.
Fortis
Fortis (TSX: FTS) raised its dividend in each of the past 51 years. The stability of the dividend growth is due to the company’s ability to expand through a combination of strategic acquisitions and internal development projects. Revenue from the utility assets is primarily rate-regulated. This means cash flow tends to be predictable and reliable. Businesses in the portfolio include natural gas distribution utilities, power generation facilities, and electricity transmission networks.
Fortis is working on a $26 billion capital program that will boost the rate base from $39 billion in 2024 to $53 billion in 2029. As the new assets are completed and go into service, the jump in revenue should support rising dividends. Fortis has other projects under consideration that could get added to the capital program. Falling interest rates could also spur a new wave of consolidation in the utility sector.
Fortis trades near $64 at the time of writing, compared to the 2025 high of around $69. Investors who buy the dip can pick up a dividend yield around 3.8% and simply wait for the planned annual dividend growth of 4-6% to steadily increase the yield on the initial investment.
The bottom line
CNRL and Fortis pay good dividends that should continue to grow. The stocks are trading at discounted prices right now in an expensive market. If you have some cash to put to work in a self-directed RRSP focused on dividend growth, these stocks deserve to be on your radar.
