Retires and other income investors are searching for attractive Canadian dividend stocks to add to their self-directed Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP) portfolios.
The TSX is near its record high, and economic headwinds could be on the horizon. With this in mind, investors should consider sector leaders that pay reliable dividends and trade at reasonable prices.
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Canadian Natural Resources
Canadian Natural Resources (TSX:CNQ) is a major player in the Canadian oil and natural gas industry. The stock trades near $44 per share at the time of writing, compared to $55 at its highest point in 2024.
Weaker energy prices are to blame for most of the decline. West Texas Intermediate (WTI) oil trades near US$61 per barrel compared to US$80 last year. Natural gas prices in Canada have also come under pressure in 2025, adding to the negative sentiment.
CNRL, however, remains very profitable. Production growth from acquisitions and drilling programs helps offset some of the margin squeeze due to the lower energy prices. CNRL is very efficient and has a broad range of oil assets, including oil sands, conventional light and heavy oil, and offshore oil production. The company says its WTI breakeven price is about US$40 to US$45 per barrel. Natural gas should have a bright future as export capacity from liquified natural gas (LNG) expands on the West Coast. CNRL owns vast natural gas reserves in western Canada and would benefit from greater access to higher-priced global markets.
The company uses its strong balance sheet to take advantage of downturns to acquire assets at discounted prices. CNRL can then reap the rewards when energy prices rebound. As the sole or majority owner of most of its operations, CNRL also enjoys capital flexibility. Management does a good job of moving capital around the portfolio to get the best returns, depending on shifts in energy prices.
CNRL raised the dividend in each of the past 25 years. Investors who buy CNQ stock at the current price can get a dividend yield of 5.3%.
Canadian National Railway
Canadian National Railway (TSX:CNR) trades near $133 per share. The stock was as high as $180 in early 2024, but has since been on a downward trend.
Uncertainty around trade negotiations between the United States, Canada, China, and Mexico has forced CN to walk back its financial guidance for 2025 and 2026. This will keep investors on the sidelines until there is more clarity.
CN operates rail lines that connect ports on the Pacific and Atlantic coasts of Canada to the Gulf Coast in the United States. Tariffs on cars, lumber, crops, and metals impact the trade and shipments of these products. CN moves 300 million tons of commodities, manufactured products, and finished goods every year. The network is a key part of the smooth operation of the economy in the United States and Canada.
Investors will need to be patient, but there should be decent upside potential from this level. CN remains very profitable and has increased the dividend in each of the past 29 years.
The bottom line
Canadian Natural Resources and Canadian National Railway trade at discounted prices and 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.
