With stock markets sitting at record highs investors are wondering which names in the TSX might still be attractive to buy right now for a self-directed Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP) portfolio focused on dividends and long-term total returns.
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Fortis
Fortis (TSX: FTS) is a good stock to buy if you are concerned the economy might be headed for a rough patch. The utility firm gets nearly all of its revenue from rate-regulated businesses that provide essential products, including electricity and natural gas.
Fortis is working on a $28.8 billion capital program that will boost the rate base by a compound annual rate of about 7% per year over five years. The increase in cash flow should support management’s plan to raise the dividend by 4% to 6% annually through at least 2030.
Fortis increased the dividend in each of the past 52 years. At the current share price, investors can get a yield of 3.3%.
Canadian Natural Resources
Canadian Natural Resources (TSX: CNQ) trades near $67 at the time of writing compared to nearly $71 at the recent high. Investors can take advantage of the pullback to start a position and look to add to the holdings on any additional downside.
Continued volatility is expected in the energy sector as each U.S. media report of a potential deal with Iran on opening the Strait of Hormuz sends oil prices lower, only for the prices to surge again when the news turns out to be too optimistic.
At some point an agreement will get done and oil prices should drop sharply when that happens, but it will take time for the global oil market to rebalance and prices are likely to remain elevated for some time compared to where they were last year.
CNRL is in a good position to benefit from Canada’s plan to become an energy superpower by boosting export capacity to sell oil and liquified natural gas to international buyers. The company holds vast reserves and has production operations across the full hydrocarbon spectrum.
CNRL raised its dividend in each of the past 26 years. Investors who buy the stock at the current price can get a dividend yield of 3.7%.
Enbridge
Enbridge (TSX: ENB) increased its dividend in each of the past 31 years. The stock is at a record high near $80 after a 26% surge in the past 12 months, but still offers a decent 4.8% dividend yield at the current share price.
Enbridge is working on a $40 billion capital program with investments spread out across its pipeline infrastructure, utilities, renewable energy, and export divisions. It is a good time to be an energy infrastructure firm in Canada and the United States with both governments focused on big investments to boost exports and ensure adequate power supply to meet rising demand from AI data centres.
The bottom line
Fortis, CNRL, and Enbridge 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.
