Canadian retirees and other income investors are searching for good TSX dividend stocks to add to their self-directed Tax-Free Savings Account (TFSA) portfolios.
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TC Energy
TC Energy (TSX: TRP) trades near $87 per share at the time of writing. The stock is trending higher after a steep pullback, but still remains well below the $100 it hit earlier this year.
Investors can take advantage of the dip to pick up a solid 4% yield and wait for dividend increases to boost the yield on the initial investment. TC Energy raised the dividend in each of the past 26 years.
A strong capital program and growth opportunities in the natural gas infrastructure sector should support ongoing dividend hikes. TC Energy recently announced plans to double capacity on its Coastal GasLink pipeline that carries natural gas from Canadian producers to the new LNG Canada export facility on the coast of British Columbia. LNG Canada is moving ahead with a $33 billion expansion of the site.
Global demand for Canadian natural gas is strong as countries around the world seek out reliable supplies from stable producers after being hit by disruptions caused by wars in Ukraine and the Middle East. Canada trails the U.S. on its construction of LNG export terminals, but is planning to ramp up developments as part of the country’s goal of becoming an energy superpower. TC Energy’s strong position as a major natural gas storage and transmission firm puts it in a good position to participate in the expansion of pipelines to carry natural gas to new export terminals. One potential project being evaluated would bring the fuel from producers to a new export site near Churchill, Manitoba where the shipments would head to Europe via Hudson Bay.
TC Energy’s current backlog of projects will see the company invest roughly $6 billion per year over the medium term on natural gas and power generation assets.
Enbridge
Enbridge (TSX: ENB) is another major player in the North American energy infrastructure industry. The company is best known for its oil pipeline networks that move about 30% of the oil produced in Canada and the United States. The company continues to expand the oil infrastructure division, with two acquisitions announced in the United States in recent weeks worth a combined total of more than US$3 billion.
Most of the growth in the past few years occurred in the U.S. as Enbridge diversified its asset portfolio. It spent US$3 billion to buy an oil export terminal in Texas in 2021 and purchased three natural gas utilities for US$14 billion in 2024. The surge in demand of oil and natural gas should drive higher volumes across the network.
Enbridge is working on a $41 billion capital program that is expected to deliver distributable cash flow growth of about 5% per year over the medium term. This should enable the board to continue raising the dividend. Enbridge has increased the distribution annually for the past 31 years.
The stock is down to $67 from $80 a few months ago. Investors who buy the pullback can get a dividend yield of 5.8% today.
The bottom line
TC Energy and Enbridge pay good dividends that should continue to grow. If you have some cash to put to work, these stocks deserve to be on your radar.
