Buy when others are selling and sell when others are buying. This is a phrase that many seasoned investors typically follow, especially during periods of market volatility. Downturns see many investors focus more on investing in dividend stocks to mitigate losses. However, ignoring dividend stocks during a bull market is not the wisest move.
Despite several days of upward movement, the S&P/TSX Composite Index can easily give way to a significant downturn after the holiday season ends. As of this writing, the Canadian benchmark index is up by 5.4% from its November 20, 2025, level. The index is hovering around new all-time highs, but you never know when it might fall.
It might be a good idea to allocate some investment capital to defensive investments that can deliver returns when the downturn comes. To this end, here are two TSX dividend stocks you should consider adding to your self-directed investment portfolio.
National Bank of Canada
National Bank of Canada (TSX:NA) is a major player in the Canadian financial services industry. While it pales in comparison to the biggest bank stocks in Canada, the $67.4 billion market-cap Canadian bank is no minnow on the stock market. It is the sixth-largest Canadian bank; it may not be as big as the Big Five, but it has significantly outperformed its peers.
As of this writing, the stock trades for $172.62 per share. It is up by over 29% year-to-date, and by almost 300% in the last decade. The bank has a solid franchise in Quebec, which is a less volatile market than the rest of Canada. The bank also has a successful track record in capital and wealth management markets.
While it only offers quarterly payouts with a 2.9% dividend yield, it has grown payouts at an 11% compounded annual growth rate (CAGR) over the last five years, which is more than a fair compromise. It can be a good investment to consider for your self-directed portfolio.
Canadian Natural Resources
Canadian Natural Resources Ltd. (TSX:CNQ) is a top dividend stock that many Canadian stock market investors own. The stock has increased its payouts at an impressive 21% CAGR for 25 consecutive years, making it an impeccable stock for dividend-seeking investors. The $94.7 billion market-cap company headquartered in Calgary is a major oil and natural gas producer in Canada.
Its portfolio of low-decline and long-life assets, combined with energy reserves expected to last for at least three decades, makes it an attractive investment to consider. The stock pays investors $0.5875 per quarter per share, translating to a juicy 5.2% dividend yield that you can lock into your portfolio today for decades of passive income.
Foolish takeaway
It is important to remember that even the most reliable dividend stocks are not immune to broad market pullbacks. However, they can be good holdings due to reliable quarterly or monthly dividend distributions. These payouts can help you continue getting returns until the dust settles and share prices recover to better levels.
If you are looking for high-quality dividend stocks to hold through any market environment, National Bank of Canada stock and Canadian Natural Resources stock can be good holdings to consider.
