Retirees and other dividend investors are searching for good TSX stocks to add to a self-directed Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP) portfolio.
With markets sitting near record highs and economic uncertainty on the horizon, it makes sense to consider companies that can maintain or extend their dividends even during a downturn in their sector or the broader economy.
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TC Energy
TC Energy (TSX:TRP) trades near $86 per share at the time of writing. The stock is up nearly 30% in the past year but is off its recent high around $90, giving investors a chance to buy the pipeline infrastructure and power generation firm on a bit of a dip.
TC Energy is primarily a natural gas transmission and gas storage company, but it also owns power generation assets. The company spun off its oil pipeline business in 2024 as part of its efforts to streamline the business and monetize non-core holdings. At the time, TC Energy was focused on reducing the debt it had taken on to complete the Coastal GasLink pipeline that now carries natural gas from Canadian producers to the LNG Canada export facility located on the coast of British Columbia.
International demand for Canadian natural gas is expected to rise considerably as countries seek out reliable supplies of the fuel. TC Energy plans to double the capacity of Coastal GasLink in the second phase of the project. If the expansion gets the green light, it will boost TC Energy’s revenue stream in the coming years.
TC Energy will also benefit from the 2025 completion of the Southeast Gateway pipeline in Mexico. The asset was built to move natural gas from production sites to gas-fired power generation facilities being built in the country.
TC Energy intends to invest roughly $6 billion per year on capital projects through 2030. As new assets are completed and go into service, the boost to cash flow should support ongoing dividend growth. TC Energy raised the dividend in each of the past 26 years. Investors who buy TRP at the current price can get a dividend yield of 4%.
Fortis
Fortis (TSX:FTS) has increased its dividend for 52 consecutive years. This is a key reason the stock price has also drifted higher over time, providing investors with solid long-term total returns.
Fortis continues to grow through organic investments. The current $28.8 billion capital program is expected to boost the rate base by roughly 7% per year through 2030. This will help drive revenue and cash flow higher to support planned annual dividend increases of 4% to 6% over that timeframe.
Fortis owns natural gas distribution utilities, power generation facilities, and electricity transmission networks in Canada, the United States, and the Caribbean. Investments in gas-fired power plants and grid expansion are required to meet rising electricity demand, largely driven by new AI data centres. Fortis is positioned well to benefit from this trend.
Investors can currently get a 3.25% dividend yield from the stock. This is lower than the yield available from other companies, but the dividend growth will steadily boost the return on the initial investment.
The bottom line
TC Energy and Fortis 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.
