Canadian retirees and other dividend investors are wondering which TSX dividend stocks are good to buy right now for a self-directed Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP) portfolio focused on income and long-term total returns.
Markets are sitting near record highs and the recent surge in oil prices risks triggering a global economic downturn later this year. With this scenario in mind dividend investors might want to consider stocks of companies that can ride out some turbulence.
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Fortis
Fortis (TSX:FTS) trades near $76 per share at the time of writing. The stock is up about 13% in the past year, but is off the recent high above $80. Investors can take advantage of the pullback to start a new position or add to an existing one.
Fortis owns utility assets, including power generation facilities, electricity transmission infrastructure, and natural gas distribution operations. These businesses provide essential services to homes and business in Canada, the United States, and the Caribbean. Revenue tends to be predictable and reliable, which makes it easier for management to plan growth investments.
Fortis is currently working on a $28.8 billion capital program that is expected to boost the rate base by about 7% per year over five years. As the new assets are completed and go into service the bump in cash flow should support the company’s plan to raise the dividend by 4% to 6% annually through 2030. That is good guidance in the current economic environment.
Fortis has other projects under consideration that could get added to the development pipeline. In addition, the company would be a good candidate to participate in any new projects launched by Canadian provinces and the federal government to build a national power grid.
Fortis has increased the dividend annually for the past 52 years. Investors who buy the stock at the current price can get a dividend yield near 3.4%. That is lower than the yield available from other dividend stocks, but the steady dividend growth will raise the return on the initial investment.
TC Energy
TC Energy (TSX:TRP) trades for $82 per share at the time of writing. It was recently as high as $90 and is up more than 20% in the past year.
The stock went through a rough spell in 2022 and 2023, dropping from $74 to $45. Soaring interest rates were a big part of the story at that time, as TC Energy had to take on extra debt to get its Coastal GasLink pipeline completed. Management subsequently did a good job of monetizing non-core assets to shore up the balance sheet. This, along with the drop in interest rates in 2024 and 2025, helped spur the rebound in the share price.
TC Energy operates natural gas transmission and storage infrastructure in Canada, the United States, and Mexico. It also has power generation facilities. Domestic and international demand for Canadian natural gas is expected to rise in the coming years as gas-fired power generation sites are built to provide power for AI data centres in the United States, and global buyers seek out reliable supplies of liquified natural gas.
TC Energy’s near-term capital program is expected to be in the range of $6 billion per year. The company is also evaluating the possibility of doubling the Coastal GasLink line that carries natural gas to the LNG Canada export facility on the coast of British Columbia.
TC Energy would also be a prime candidate to participate in the construction or operation of any new natural gas pipeline infrastructure that gets the green light in the next few years, as Canada seeks to expand its international energy sales.
TC Energy raised the dividend in each of the past 26 years. Investors can currently get a dividend yield of 4.2% from TRP.
The bottom line
Fortis and TC Energy 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.
