Canadian retirees and other investors seeking dividend stocks for income and total returns are wondering which TSX companies might be good to buy right now for a self-directed Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP) portfolio.
Source: Getty Images
Canadian Natural Resources
Canadian Natural Resources (TSX: CNQ) trades close to $60 per share at the time of writing compared to a 2026 closing high near $70.
The oil and gas giant’s share price has been on an upward trend for the past six years, rising from below $10 at one point during the pandemic crash to the recent record levels. Investors who had the courage to buy during the pandemic are sitting on nice gains. Those who missed the stellar recovery, however, should still consider adding CNRL to their watch.
The company has a diversified portfolio of energy assets that span the full product spectrum, including oil sands, conventional heavy and light oil, offshore oil, and natural gas production. CNRL is the sole or majority owner on most of its holdings, which is important when it comes to being able to quickly shift capital investments to take advantage of positive moves in commodity prices.
This company has a solid track record of delivering growth through a combination of strategic acquisitions and successful drilling programs. CNRL possesses the financial firepower to buy large assets that come up for sale in Canada when markets are weak or foreign owners decide to exit the country. Those deals add production that is usually immediately accretive and normally boost reserves, as well. When energy prices rebound, CNRL benefits from the surge in margins on the sale of production from the new assets.
The spike in oil prices that occurred this year has helped drive up profits, but CNRL is adept at boosting revenue and earnings through production growth even when oil prices are weaker. That has enabled the board to provide steady dividend growth through the volatility of energy cycles. CNRL raised the dividend in each of the past 26 years.
Outlook
New pipeline capacity connecting Canadian producers to export facilities on the British Columbia coast is giving CNRL and its peers more access to international buyers for Canadian oil and liquified natural gas. As part of Canada’s plan to reduce reliance on the United States for energy sales, the government recently announced plans to build a new oil pipeline to the B.C. coast alongside the current Trans Mountain line that was recently completed. New natural gas pipelines and export facilities are also in the works to expands LNG sales.
CNRL is a major producer of both oil and natural gas, so it is positioned well to benefit from the new infrastructure.
The bottom line
CNRL offers investors an attractive 4.2% dividend yield at the current price and should be able to deliver ongoing distribution growth. Volatility should be expected in the near term, but pullbacks should be viewed as an opportunity to add to the position. If you have come cash to put to work in a buy-and-hold portfolio focused on dividends, this stock deserves to be on your radar.
