With many popular Canadian dividend stocks trading near record highs, investors are wondering which top TSX stocks might still be good to buy for a self-directed Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP) portfolio focused on income and long-term total returns.
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Canadian National Railway
Canadian National Railway (TSX:CNR) trades near $155 per share at the time of writing. The stock is up about 15% in 2026, but is still way below the $179 it reached in early 2024.
The pullback in the share price through much of 2024 and 2025 had several causes. Initially, CN took a hit due to labour strikes at key ports that the railway serves. Wildfires in Alberta in 2024 also hindered operations. Customers had to find alternative routes to move their products during these interruptions, leading to a decrease in anticipated volume for the year, as well as an increase in some expenses. CN still managed to squeeze out a small revenue gain in 2024, but profits slipped compared to the previous year.
Heading into 2025, the company expected a much better performance and even provided a strong outlook for earnings growth. That all changed with the arrival of U.S. tariffs. Key Canadian sectors, including steel, aluminum, and some forestry products, took a hit. Management had to abandon guidance and said the tariffs ultimately had a $350 million negative impact on the business in 2025.
Risks
The tariff situation remains the same so far in 2026, and there is added uncertainty on how negotiations will pan out with the Canada-U.S.-Mexico Agreement (CUSMA). A July 1 deadline to make a decision on whether to extend CUSMA, modify the agreement, or scrap it altogether will likely be missed. As such, clarity on tariffs might not come for several months.
Soaring fuel will put pressure on CN if it can’t pass through the added expenses to its customers. That being said, trucking companies face the same problem, so CN could potentially pick up some business from the trucking segment.
A proposed merger in the United States between Union Pacific and Norfolk Southern would create an east-west rail giant in the American market connecting 100 ports and 43 states. Analysts are still trying to determine the ultimate impact that would have on CN, which has rail lines running from Canada south to the American Gulf Coast.
Opportunity
Demand for Canadian commodities is rising due to the closure of the Strait of Hormuz. Fertilizer, coal, and oil are transported by CN to Canadian ports for shipping overseas. This could help offset some of the pain in the other segments impacted by American tariffs.
CN remains very profitable, despite the headwinds. The company reported adjusted net income of $1.1 billion in Q1 2026, down about 5% from the same period last year. CN is using excess cash to buy back shares and continues to raise the dividend. The board has increased the distribution to shareholders in each of the past 31 years.
As soon as a new trade deal is announced between the U.S. and Canada, there should be a rebound in demand for CN’s services as businesses will have clarity on tariffs.
The bottom line
Volatility is expected in the near term, but CN should be attractive at the current level for a buy-and-hold portfolio. If you have some cash to put to work, this stock deserves to be on your radar.
