Canadian savers are searching for top TSX dividend stocks to add to their self-directed Registered Retirement Savings Plan (RRSP) portfolios. With the market near record levels, it makes sense to consider stocks with long histories of delivering dividend growth through full economic cycles.
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Fortis
Fortis (TSX:FTS) is a Canadian utility company with operations in Canada, the United States, and the Caribbean. Businesses include natural gas distribution utilities, power generation facilities, and electric transmission networks.
The stock is up 13% this year, but has pulled back a bit in the past two weeks, giving investors a chance to buy the dip.
Fortis is working on a $26 billion five-year capital program that is expected to raise the rate base from $39 billion in 2024 to $53 billion in 2029. The company is investing $5.2 billion in 2025 as part of that process.
As new assets are completed and go into service, the boost to revenue and cash flow should support planned annual dividend growth of 4% to 6%. Fortis has a number of projects under consideration that could get added to the backlog. This would potentially boost the size of the dividend increases or extend the dividend-growth guidance beyond 2029.
In addition, the Canadian government is evaluating the possibility of expanding electricity grids across the country. Fortis has electric transmission assets and would potentially be a candidate to build and operate new transmission infrastructure.
Fortis has a good track record of boosting growth through strategic acquisitions. Falling interest rates could trigger a new wave of consolidation in the utility sector. Fortis might even become a takeover target as large alternative asset managers look for opportunities with reliable and growing cash flows.
The board has increased the dividend in each of the past 51 years. Investors who buy FTS stock at the current price can get a dividend yield of 3.7%.
Enbridge
Enbridge (TSX:ENB) is best-known for its oil pipeline infrastructure. This makes sense considering the business moves about 30% of the oil produced in Canada and the United States. In recent years, however, Enbridge has expanded and diversified its portfolio. In 2024, Enbridge spent US$14 billion to buy three natural gas utilities in the United States. Enbridge is also betting on growth in international demand for North American oil and natural gas with its investments in oil and natural gas liquids (NGL) export terminals. In addition, the company bulked up its renewable energy assets with the purchase of an American solar and wind project developer.
Enbridge has a $32 billion capital program on the go that will help drive steady cash flow growth in the coming years. This should enable the board to continue raising the dividend. Enbridge has increased the payout annually for the past three decades.
Investors who buy ENB stock at the current level can get a dividend yield of 5.7%.
The bottom line
Fortis and Enbridge pay attractive dividends that should continue to grow. If you have some RRSP cash to put to work, these stocks deserve to be on your radar.
