Canadian dividend investors are searching for top TSX stocks to add to their self-directed Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP) portfolios focused on income and total returns.
When markets are near record highs and economic headwinds are potentially on the way, it is a good idea to consider stocks that can keep paying dividends during tough times.
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Enbridge
Enbridge (TSX: ENB) trades below $71 at the time of writing compared to a recent high around $77. The dip gives investors who missed the big rally a chance to buy a pullback and pick up a solid 5.5% dividend yield.
Enbridge raised the dividend in each of the past 31 years. That’s the kind of reliability investors want to see when choosing a long-term pick for a dividend portfolio.
Enbridge is able to boost revenue and cash flow through a combination of acquisitions and development projects. The company diversified its assets in recent years, moving into energy exports and bulking up the utilities and renewable energy segments. Enbridge bought an oil export terminal in Texas and is a partner in the Woodfibre liquefied natural gas (LNG) facility being built on the coast of British Columbia. The company spent $14 billion in 2024 to buy three American natural gas utilities. It also added solar and wind assets, with a presence in both North America and Europe.
Enbridge’s current $39 billion capital program will help the company meet its goal of increasing distributable cash flow by 5% per year over the medium term. This should support ongoing dividend increases.
Bank of Nova Scotia
Bank of Nova Scotia (TSX: BNS) trades near $103 per share at the time of writing. This isn’t too far off the $106 high it reached this year. The stock is up 55% in the past 12 months, delivering some relief for long-term investors who watched Bank of Nova Scotia underperform its peers for some time.
The turnaround is partly due to a strategy shift. Bank of Nova Scotia is streamlining operations and focusing new growth investments on the United States and Canada, while reducing its exposure to Latin America where the bank spent billions of dollars on acquisitions over the past three decades. Bank of Nova Scotia sold its operations in Colombia, Costa Rica, and Panama last year. It still has large operations in Mexico, Peru, and Chile.
On the investment side, the bank spent US$2.8 billion in 2024 to buy a 14.9% stake in KeyCorp, an American regional bank. The move gives Bank of Nova Scotia a platform to expand its American presence. KeyCorp has more than 900 branches spread out across 15 states.
Despite the big rally in the share price, investors can still get a 4.3% yield from BNS. As return on equity improves, the market should be more comfortable giving the stock a higher earnings multiple.
The bottom line
Enbridge and Bank of Nova Scotia pay good dividends that should continue to grow. If you have some cash to put to work in a dividend portfolio, these stocks deserve to be on your radar.
