Canadian investors are searching for top TSX dividend stocks to add to their self-directed Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP) portfolios focused on income and total returns.
In the current market conditions, where the TSX is at a record high while tariffs threaten economic growth, it makes sense to consider companies with good track records of providing dividend growth throughout the economic cycle.
Enbridge
Enbridge (TSX:ENB) is up more than 20% in the past year, but the stock still provides a dividend yield of 5.8%.
Enbridge is diversifying its assets to take advantage of emerging opportunities in the energy sector. In recent years, the company purchased an oil export terminal in Texas and acquired a solar and wind developer. In 2024, Enbridge became the largest operator of natural gas utilities in North America with its US$14 billion purchase of three natural gas distribution businesses in the United States. Enbridge is also a partner on the Woodfibre liquified natural gas (LNG) export facility being built on the coast of British Columbia.
On the development side, Enbridge is working through a $32 billion backlog of capital projects. The addition of the new assets will boost revenue and cash flow. This should support steady dividend growth in the coming years. Enbridge has increased the dividend annually for the past three decades.
Canadian Natural Resources
Canadian Natural Resources (TSX:CNQ) produces oil and natural gas. The company is a giant in the Canadian energy sector with a current market capitalization of nearly $87 billion. This gives CNRL the financial clout to make large strategic acquisitions that are beyond the reach of many of its peers. For example, CNRL purchased Chevron’s Canadian assets last year for US$6.5 billion. The deal added production and reserves, helping CNQ deliver solid earnings in the past two quarters, despite weaker energy prices.
CNRL has the flexibility to quickly move capital around the asset portfolio to generate the best margins as commodity prices shift. Management has done a good job of reducing operating costs in recent years. In fact, CNRL says its West Texas Intermediate (WTI) breakeven price is around US$40 to US$45 per barrel. WTI currently trades near US$64 per barrel, so the company is still making good money. Oil was above US$80 last year, which is why CNRL’s share price is down to $41 from $55 in 2024.
Investors can take advantage of the pullback to pick up a dividend yield of 5.6% today. The board has increased the dividend in each of the past 25 years. CNRL has a strong balance sheet and continues to grow its production, so the dividend expansion should continue, even in an environment of weaker energy prices.
New pipelines connecting oil and natural gas producers to the three Canadian coasts are now back on the table as Canada looks to reduce its reliance on the United States for energy sales. Enbridge would potentially be part of the construction and operation of new infrastructure, while CNRL would benefit from the access to additional international customers.
The bottom line
Enbridge and CNRL pay attractive dividends that should continue to grow. If you have some cash to put to work in a TFSA or RRSP, these stocks deserve to be on your radar.
