Canadian investors are using their self-directed Registered Retirement Savings Plan (RRSP) to build portfolios that can provide retirement income to complement CPP, OAS, and work pensions.
One popular investing strategy involves owning top TSX dividend stocks and using the distributions to buy new shares.
Source: Getty Images
Power of compounding
Each dividend payment used to buy more shares bumps up the size of the payout on the next distribution. Dips in the share price provide opportunities to add even more shares. The wealth impact of the process is small at the start, but dividend reinvestment can turn modest initial holdings into significant savings over the long run, especially when dividends increase at a steady rate and the share price trends higher.
Some companies even offer discounts on the share price if the purchases are made through the dividend reinvestment plan (DRIP). This can make a big difference on total returns over time.
Fortis
Fortis (TSX: FTS) is a good example of a top TSX dividend-growth stock that investors can add to a portfolio and simply sit on for decades.
The company owns power generation, electricity transmission, and natural gas distribution businesses mainly located in Canada and the United States. These are rate-regulated assets that provide predictable revenue streams in all economic conditions.
Fortis has a $28.8 billion capital program on the go that is expected to boost the rate base steadily over the next five years. Revenue and earnings growth generated by the new assets should support the company’s plan to raise the dividend by 4% to 6% annually through at least 2030. The board increased the dividend in each of the past 52 years.
A $10,000 investment in Fortis 30 years ago would be worth more than $300,000 today with the dividends reinvested.
Bank of Nova Scotia
Bank of Nova Scotia (TSX: BNS) is up more than 60% in the past year and now trades near its record high. While the easy money has arguably already been made, Bank of Nova Scotia should still be an attractive pick for the long run.
The company is making good progress on a turnaround plan that is streamlining the business to reduce expenses while also shifting growth investments from Latin America to the United States and Canada. Bank of Nova Scotia reported solid fiscal Q2 2026 earnings with adjusted net income coming in at $2.65 billion compared to $2.07 billion in the same period last year. Return on equity rose to 13.2% from 10.4%.
Investors who buy BNS stock at the current level can get a dividend yield of 3.6%.
A $10,000 investment in Bank of Nova Scotia 30 years ago would be worth close to $500,000 today with the dividends reinvested.
Enbridge
Enbridge (TSX: ENB) trades near $70 per share at the time of writing. The stock is down from the 2026 high of more than $80, providing investors who missed the big rally over the past two years a chance to pick up the stock on a meaningful pullback.
Enbridge’s $41 billion secured capital program is expected to boost distributable cash flow (DCF) by 5% per year over the medium term. This should enable the company to continue raising the dividend. Enbridge increased the distribution in each of the past 31 years. At the current share price, the stock provides a dividend yield of 5.5%.
A $10,000 investment in Enbridge 30 years ago would be worth more than $550,000 today with the dividends reinvested.
The bottom line
Fortis, Bank of Nova Scotia, and Enbridge pay good dividends that should continue to grow. If you have some cash to put to work in a self-directed RRSP, these stocks deserve to be on your radar.
