Canadian investors are searching for good TSX dividend stocks to add to their self-directed Tax-Free Saving Account (TFSA) or Registered Retirement Savings Plan (RRSP) portfolio focused on dividends and total returns.
In the current market conditions with the TSX near its record high and economic uncertainty on the horizon it makes sense to look for companies with good track records of delivering reliable dividends through recessions as well as during the good times.
Fortis
Fortis (TSX:FTS) is a Canadian utility company with more than $70 billion in assets located across Canada, the United States, and the Caribbean. Businesses include power generation facilities, electricity transmission networks, and natural gas distribution utilities.
These assets generate rate-regulated revenue that leads to predictable and reliable cash flow. This is one reason Fortis has been able to boost its dividend annually for the past 51 years.
Fortis is working on a $26 billion capital program to drive revenue and profit growth. As the new assets are completed and go into service there should be adequate cash flow expansion to support planned annual dividend increases of 4% to 6% through 2029.
Enbridge
Enbridge (TSX:ENB) trades near $66 per share at the time of writing. That’s down from the 12-month high around $70, so investors have a chance today to buy ENB stock on a bit of a dip.
Enbridge is a giant in the North American energy infrastructure sector. The company is best known for its extensive oil and natural gas transmission networks, but Enbridge also owns energy export facilities, naturual gas distribution utilities, and renewable energy sites.
Growth comes through a combination of acquisitions and organic projects. Enbridge spent US$14 billion in 2024 to buy three natural gas utilities in the United States, while the current capital plan backlog sits at $32 billion.
ENB stock raised the dividend in each of the past 30 years. Investors can currently get a dividend yield of 5.7%.
Canadian Natural Resources
Canadian Natural Resources (TSX:CNQ) trades near $42 per share at the time of writing. The stock was as high as $55 in 2024, but has pulled back as a result of weaker oil prices. West Texas Intermediate (WTI) oil trades near US$57 per barrel compared to US$80 last year.
Oil analysts expect headwinds to continue amid rising supply from OPEC and other producers, even as demand could decline due to ongoing economic challenges in China and a potential economic downturn in the United States next year. This arguably makes CNRL a contrarian pick today.
Despite the difficult market conditions, however, CNRL remains very profitable. The company says its WTI breakeven price is in the US$40 to US$45 range. Production is rising through acquisitions and successful drilling programs. The added revenue helps offset the tighter margins.
New pipeline capacity to export facilities in Canada could be on the way. This would provide a boost for CNRL’s oil and natural gas divisions in the coming years.
Investors hoping for a big bounce will need to be patient, but the stock should be attractive at this level with a dividend yield of 5.5%. CNRL raised the distribution in each of the past 25 years.
The bottom line
Fortis, Enbridge, and Canadian Natural Resources pay good dividends that should continue to grow. If you have some cash to put to work these stocks deserve to be on your radar.
