The recent pullback in the share prices of some top TSX dividend stocks is giving self-directed Tax-Free Savings Account (TFSA) investors an opportunity to buy the dip and secure a higher yield for their portfolios focused on generating steady passive income.
Enbridge
Enbridge (TSX:ENB) trades near $65 per share at the time of writing compared to the 2025 high of around $70.
The stock is still up considerably over the past 24 months, rising from $45 in the fall of 2023 after an extended decline from $59 in the middle of 2022.
Changes to interest rates have been the big story for Enbridge’s share price. The energy infrastructure giant uses debt to fund part of its growth program that includes acquisitions and development projects. When the U.S. Federal Reserve and the Bank of Canada raised interest rates in 2022 and 2023, there was an immediate increase in variable-rate debt expenses, while borrowing in the bond market became more expensive.
Investors exited pipeline and utility stocks as concerns mounted that dividends could be impacted as a result of the pressure put on cash flow by the rising debt expenses. At the same time, rates offered on fixed-income alternatives, like Guaranteed Investment Certificates (GICs), soared. This likely led to a shift of funds to the safer investment options.
Enbridge’s rebound began in late 2023, around the same time the central banks indicated they were done raising interest rates. Subsequent rate cuts in 2024 and 2025 have provided an extra tailwind. The recent pullback in the stock is probably due to investors trying to decide if more rate cuts are on the way in 2026. At this point, the U.S. Federal Reserve is broadly expected to cut rates again next year. Canada, however, could put additional cuts on hold.
Income investors shouldn’t worry too much, unless interest rates suddenly spike again due to a surge in inflation. Enbridge is working on a $35 billion capital program and continues to make strategic acquisitions to drive growth. As new assets generate revenue, the company expects distributable cash flow to increase at a steady pace over the medium term. This should support ongoing dividend hikes. Enbridge recently raised the dividend by 3% and has increased the distribution for 31 consecutive years.
Investors who buy ENB stock at the current level can get a dividend yield of 6%.
Canadian Natural Resources
Weak oil prices are putting pressure on energy stocks. This trend could continue for some time amid supply growth that is outstripping demand expansion. Markets are also starting to unwind some of the geopolitical risk premium on the expectations of a possible peace deal between Russia and Ukraine.
Income investors with a buy-and-hold strategy might want to start nibbling on Canadian Natural Resources (TSX:CNQ) while it is under pressure. The oil and natural gas producer continues to deliver profit growth through production increases driven by acquisitions and drilling programs. CNRL has a strong balance sheet and is very efficient at deploying capital to the best opportunities across the portfolio. Management says the West Texas Intermediate (WTI) breakeven price for the company is in the US$40 to US$45 per barrel range. WTI is close to $55 at the time of writing, so the company is still making decent money on its operations.
At some point, the oil market will rebalance, and prices should rebound. In the meantime, investors can pick up a dividend yield of 5.4% from CNQ. The board has increased the dividend in each of the past 25 years.
The bottom line
Enbridge and CNRL pay good dividends that should continue to grow. If you have some cash to put to work in an income portfolio, these stocks deserve to be on your radar.
