Canadian retirees and other dividend investors are wondering which top TSX stocks are good to buy for a self-directed Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP) portfolio focused on dividend income and long-term total returns.
In the current market conditions where the TSX sits near a record high, it makes sense for investors to consider solid businesses with wide moats.
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Fortis
Fortis (TSX: FTS) owns roughly $75 billion in utility assets in Canada, the United States, and the Caribbean. The businesses include rate-regulated power generation facilities, electric transmission networks, and natural gas distribution utilities.
Revenue tends to be predictable and reliable from these businesses, as households and companies need power and natural gas in all economic conditions.
Demand for electricity and natural gas is expected to rise in the coming years. Gas-fired power generation facilities are being built to supply power to AI data centres. This adds to the increase in electricity consumption that is expected as more people transition to electric vehicles.
Fortis is working on a $28.8 billion capital program that will increase the rate base by a compound annual rate of about 7% over five years. This should lead to rising revenue and higher cash flow to support steady dividend hikes. Fortis raised the dividend in each of the past 52 years and intends to increase the distribution by 4% to 6% annually through at least 2030.
Enbridge
Enbridge (TSX: ENB) is a giant in the North American energy infrastructure and utilities sector with a current market capitalization near $145 billion.
The company is best known for its extensive oil and natural gas transmission pipeline networks that move roughly 30% of the oil produced in Canada and the United States and 20% of the natural gas used by American homes and businesses. These assets are strategically important for the smooth operation of the Canadian and U.S. economies.
In recent years, Enbridge expanded its asset portfolio to diversify the revenue stream. Enbridge acquired an oil export terminal in Texas and purchased a stake in the Woodfibre liquified natural gas (LNG) export facility being built in British Columbia. In 2024, Enbridge spent US$14 billion to buy three natural gas utilities in the United States. The deals turned Enbridge into the largest natural gas utilities operator in North America. The combination of these assets with the natural gas transmission network puts Enbridge in a good position to benefit from the expected growth in natural gas demand.
Finally, Enbridge bulked up its renewable energy group when it purchased the third-largest American solar and wind project developer. The transition to renewable energy remains important and demand is high from tech firms that want to use solar and wind to provide electricity for their facilities.
Enbridge’s current $35 billion capital program is expected to boost distributable cash flow by about 5% per year starting in 2027. This should support ongoing dividend growth. Enbridge raised the dividend in each of the past 31 years. Investors who buy ENB stock at the time of writing can get a dividend yield of 5.8%.
Bank of Nova Scotia
Bank of Nova Scotia (TSX: BNS) is up 33% in the past six months. Despite the big rally, the stock still offers a solid 4.3% dividend yield and more upside could be on the way.
Bank of Nova Scotia is making good progress on its turnaround plan to improve profitability and shift capital investments away from Latin America to focus more on the U.S. and Canada. The company reduced staff and streamlined operations to trim costs while making the business more efficient. Bank of Nova Scotia has also started the process of selling some of its businesses in Latin America and acquired a 14.9% stake in KeyCorp, an American regional bank.
Adjusted earnings and return on equity (ROE) improved in fiscal 2025. Additional ROE increases should help drive a higher price-to-earnings multiple for the stock.
The bottom line
Fortis, Enbridge, and Bank of Nova Scotia pay attractive dividends that should continue to grow. If you have some cash to put to work, these stocks deserve to be on your radar.
