With stock markets at record highs self-directed Registered Retirement Savings Plan (RRSP) investors need to be careful where they allocate new funds. Fortunately, contrarian investors can still find some top TSX dividend stocks trading at discounted prices.
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Canadian Natural Resources
Canadian Natural Resources (TSX:CNQ) trades for close to $41 per share at the time of writing compared to $55 at one point in 2024.
The pullback is primarily due to lower oil prices. West Texas Intermediate (WTI) oil trades for US$62.50 per barrel compared to more than US$80 last year. That translates into a big margin hit for oil producers. CNRL operates a variety of oil production assets, including oil sands, conventional light and heavy oil, and offshore oil. The company is also a major producer of natural gas. Natural gas prices are still higher than where they spent a good chunk of 2023 and 2024, but are down considerably from the 2025 highs.
Near-term volatility is expected in the energy market with lower oil and gas prices potentially on the horizon. That being said, CNRL remains very profitable in the current market conditions due to low break-even pricing on its operations. The company continues to boost output through strategic acquisitions and successful drilling programs, so the added cash flow should support ongoing dividend growth. CNRL raised the dividend in each of the past 25 years. Investors who buy CNQ stock at the current level can get a dividend yield of 5.7%.
When oil and gas prices rebound, the stock could move considerably higher in a short period of time.
Canadian National Railway
Canadian National Railway (TSX:CNR) trades near $130 per share at the tine of writing compared to $180 in March last year. The pullback gives investors a chance to buy CN at a nice discount and pick up a decent 2.7% yield, which is historically high for the stock.
CN operates roughly 20,000 route miles of tracks connecting the Pacific and Atlantic coasts of Canada with the Gulf Coast in the United States. The drop in the share price over the past year is largely due to labour and wildfire disruptions in 2024 and trade uncertainty in 2025.
Strikes at CN and the ports last year forced customers to find alternative routes to move their products. Wildfires in Alberta also interrupted services. These issues resulted in reduced revenue and higher expenses for CN in 2024. As a result, the full-year results saw the company deliver a small rise in revenue and a decline in profits compared to 2023.
Positive headwinds
In early 2025 CN issued a positive outlook for the year, but ongoing tariff uncertainty is impacting trade between the U.S. and Canada, as well as between the two countries and their international trading partners. In the Q2 2025 earnings report CN reduced its guidance for the year, citing the ongoing uncertainties.
Another headwind is the proposed merger of two railways in the United States. Union Pacific plans to buy Norfolk Southern in a deal that would create the first coast-to-coast US railway with 50,000 miles of track. Regulatory hurdles will be significant, but a successful combination of the two railways would reshape the North American rail industry. CN could lose some business, but might also benefit from reduced competition.
A regulatory decision on whether to allow the deal to go through isn’t expected until late 2026, at the earliest.
On the positive side, any announcement of a tariff agreement between Canada and the United States should remove uncertainty for businesses and could lead to a surge in demand for CN’s cross-border services. CN still expects to deliver revenue and earnings growth this year. The board has increased the dividend annually for 29 years and CN is using excess cash to buy back stock.
The bottom line
Near-term volatility is expected, but CNRL and CN already trade at cheap prices and could deliver meaningful upside when conditions improve. If you have some RRSP cash to put to work in a contrarian portfolio these stocks deserve to be on your radar.
