Canadian savers are searching for good TSX stocks to add to their self-directed Registered Retirement Savings Plan (RRSP) focused on dividends and total returns.
The TSX is near its record high, but investors can still find top Canadian stocks trading at reasonable prices to add to a buy-and-hold portfolio.
Canadian National Railway
Canadian National Railway (TSX:CNR) trades near $131 per share at the time of writing, compared to $180 at one point last year.
The pullback gives investors an opportunity to buy CN at a nice discount while the market waits to see how U.S. tariffs will impact the American, Canadian, and global economies. CN operates roughly 20,000 route miles of track connecting ports on the Atlantic and Pacific coasts of Canada to the Gulf Coast of the United States. The network is an important part of the transport infrastructure that enables the smooth operation of economic activity in the two countries.
CN recently lowered its earnings guidance for 2025, citing uncertainty connected to the trade negotiations between the United States and its neighbours, along with China. Businesses are waiting to see how the deals shake out before placing non-essential orders for goods. Disruption in the auto sector is also a factor as CN moves cars and car parts between Canada and the United States.
Management still expects the company to deliver adjusted diluted earnings per share growth in 2025 compared to last year. As soon as the trade picture is clear, CN should start to see normalization of demand for its services. CN raised the dividend by 5% for 2025 and is buying back up to 20 million shares. The board has increased the dividend in each of the past 29 years. Investors who buy the stock at the current level can get a dividend yield of 2.7%.
Railway consolidation in the United States is back in the news after the announcement of a planned merger between two rail companies. This could spark a new wave of consolidation in the sector, which would potentially drive up valuations.
Canadian Natural Resources
Canadian Natural Resources (TSX:CNQ) is a giant in the Canadian energy patch with a current market capitalization of more than $90 billion. The stock trades near $44 per share at the time of writing, compared to a high of $55 in 2024.
Lower oil prices are responsible for the pullback. West Texas Intermediate (WTI) oil trades near US$67 per barrel right now compared to more than $80 last year. Supply expansion and economic uncertainty caused by tariffs are providing headwinds for the oil market. Analysts widely expect the market to be in a surplus condition through the end of the year as OPEC increases output in an effort to regain some lost market share.
CNRL says its WTI breakeven price is roughly US$40 to US$45 per barrel. This means the company still generates solid margins in the current market conditions. Production continues to grow through a combination of acquisitions and successful drilling, driving earnings higher. CNRL’s extensive natural gas operations help balance out revenue fluctuations on the oil side of the business. Natural gas prices are currently higher than they were throughout most of 2023 and 2024.
CNRL raised the dividend in each of the past 25 years. More gains should be on the way. Investors who buy CNQ stock at the current price can pick up a dividend yield of 5.4%.
The bottom line
CN and CNRL are top Canadian companies with great track records of dividend growth. If you have some cash to put to work in a self-directed RRSP, these stocks deserve to be on your radar.
