Contrarian investors are searching for high-yield dividend stocks to add to their self-directed Tax-Free Savings Account (TFSA) portfolios focused on generating passive income.
Many top dividend stocks in the TSX are trading near record highs, but some names have either underperformed or pulled back from their peak and might now be oversold.
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BCE
BCE (TSX: BCE) sat out the big TSX rally over the past three years. In fact, the stock went the other direction, falling from $74 in 2022 to below $30. At the time of writing, BCE trades for close to $32 per share.
Investors hoping for a significant rebound will have to be patient. Interest rates could be headed higher in the next year, which will put new pressure on BCE’s debt. Ad sales in the radio and TV businesses remain weak, and there are fewer newcomers to Canada, especially students, who previously served as a good source of sales growth for devices and data plans.
On the upside, BCE is investing in new growth opportunities. The company spent $5 billion last year to acquire a fibre internet company in the United States where there is strong potential for expansion. At home, BCE is building sovereign AI data centres to meet strong demand from government and corporate clients. The company is also streamlining its business groups to reduce costs and make operations more efficient. Legacy media is struggling with revenue declines, but BCE’s digital offerings are performing well, including the Crave streaming service that is getting a boost from BCE’s Heated Rivalry TV series.
BCE cut its dividend by 56% in 2025. The move was painful for existing shareholders, but it also appears to have put a floor under the share price. The new dividend payment should be sustainable as the company works through its turnaround plan. Investors who buy BCE stock at the current level can get a dividend yield of 5.4%.
Enbridge
Enbridge (TSX: ENB) soared from $44 in late 2023 to $80 earlier this year. The share price has since pulled back, now trading near $69. Investors who missed the big rally can buy the dip and pick up a solid 5.6% dividend yield at this level.
Enbridge raised its dividend in each of the past 31 years. More annual increases should be on the way, supported by the company’s $41 billion secured capital program and contributions from recent acquisitions in the United States.
Enbridge just announced a US$600 million deal to buy oil pipeline assets in Texas and New Mexico. The deal makes sense as it will enable American producers in the Permian Basin to connect directly with an oil export terminal in Texas that Enbridge purchased for US$3 billion five years ago.
Enbridge has also expanded its natural gas operations. The company spent US$14 billion in 2024 to acquire three American natural gas utilities. The deals made Enbridge the largest operator of natural gas utilities in North America and fit well with the company’s natural gas transmission network in the country, which already moves 20% of the natural gas used by American businesses and households. Demand for natural gas is rising as new gas-fired power generation sites are built to supply electricity to AI data centres.
The bottom line
BCE and Enbridge pay good dividends and now trade at discounted prices. If you have some cash to put to work in a TFSA portfolio focused on passive income, these stocks deserve to be on your radar.
