With the TSX near its record high and economic headwinds potentially on the way, Canadian investors are wondering which stocks might still be good to add to their self-directed Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP) portfolios.
In the current conditions, it makes sense to seek out top dividend payers that will continue to raise their distributions, even if the economy slides into a recession.
Fortis
Fortis (TSX:FTS) trades near $72.50 at the time of writing, which isn’t too far off the 12-month high around $74.
The stock is up more than 20% in 2025, largely due to reductions in interest rates and a strong capital program. Fortis uses debt to fund part of its growth initiatives. The reduction in borrowing costs should lead to higher profits and can free up more cash for dividends or debt reduction.
Fortis is working on $29 billion in capital projects that will boost the rate base by a compound annual rate of about 7% over five years. As the new assets go into service, the increase in cash flow should support planned annual dividend hikes of 4% to 6% through 2030. That’s good guidance in an uncertain economic environment.
Investors who buy FTS stock at the current price can get a dividend yield of 3.5%.
Canadian Natural Resources
Canadian Natural Resources (TSX:CNQ) trades near $46 per share at the time of writing. The stock was as high as $55 last year, but pulled back on weaker oil prices. Analysts broadly expect the global oil market to remain in a surplus position through 2026 as production growth outpaces rising demand.
That being said, CNQ remains very profitable at the current oil price. West Texas intermediate (WTI) oil trades for US$57 per barrel at the time of writing. It was above US$80 last year. CNRL says its WTI breakeven price is in the US$40 to US$45 range.
The company continues to increase its profits through production growth driven by strategic acquisitions and successful drilling programs. CNRL is best known for its oil production operations, but it is also a major natural gas producer. This helps mitigate the volatility on the oil side.
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%.
Canadian National Railway
Canadian National Railway (TSX:CNR) is a contrarian pick right now. The stock trades below $130 per share at the time of writing, compared to $180 early last year.
Tariffs are impacting demand for CN’s services as businesses wait for more clarity on the impact of trade agreements on non-essential orders. It could be some time before the U.S. finalizes deals with Canada and other major trading partners, including China, so there could be more headwinds for CN in the coming months.
The long-term outlook, however, should be solid. Trade deals will eventually get sorted out and CN will benefit from economic expansion in the United States and Canada. The company operates a strategically important rail network connecting the Pacific and Atlantic coasts of Canada to the Gulf Coast of the United States.
CN remains very profitable and is using excess cash to buy back shares while the stock is under pressure. The board has increased the dividend in each of the past 29 years. Investors can now get a 2.8% dividend yield. Buying CN on big pullbacks has historically proven to be a savvy move for patient investors.
The bottom line
Market volatility is expected in the coming months, but Fortis, CNRL, and CN are solid companies and pay good dividends that should continue to grow. If you have some cash to put to work in a buy-and-hold portfolio, these stocks deserve to be on your radar.
