2 Attractive Dividend Stocks to Add to Your RRSP Portfolio

Here’s why Bank of Nova Scotia (TSX:BNS)(NYSE:BNS) and another top Canadian company deserve to be on your radar today.

| More on:

Canadian savers are searching for top dividend stocks to add to their self-directed RRSP holdings.

The market has bounced off the late-2018 lows, but investors can still pick up some great companies at reasonable prices. Let’s take a look at two TSX Index giants to see why they might be interesting picks for your portfolio today.

Bank of Nova Scotia (TSX:BNS)(NYSE:BNS)

Bank of Nova Scotia is Canada’s third-largest bank. Investors often choose its larger peers when adding a financial institution to their holdings, but that might begin to change.

Why?

Bank of Nova Scotia has invested billions to build a substantial presence in Latin America. The region already accounts for roughly 30% of the company’s profits, and that could grow in the coming decades. The four countries of core interest are Mexico, Colombia, Peru, and Chile. These form the heart of the Pacific Alliance, which is a trade bloc set up to promote the free movement of goods and capital among the member states.

Expansion of the middle class in this market of 200 million people should boost demand for credit and investment products in the coming decades, and Bank of Nova Scotia stands to benefit.

Management made several acquisitions last year to help drive additional growth. The purchase of BBVA in Chile doubled the bank’s market share in Chile to 14%. At home, Bank of Nova Scotia increased its wealth management assets to $230 billion through the takeovers of Jarislowsky Fraser and MD Financial.

The bank raised the dividend by 8% in fiscal 2018, and investors should see steady increases continue. At the time of writing, the dividend provides a yield of 4.6%.

Nutrien (TSX:NTR)(NYSE:NTR)

Nutrien is a giant in the global market for crop nutrients. The company sells wholesale potash, nitrogen, and phosphate to governments around the world. An extended downturn in the market put pressure on Nutrien’s predecessors, Potash Corp. and Agrium, to join forces and that appears to have been a wise decision. The company is driving down costs, and the recovery in fertilizer prices is providing a boost to cash flow.

Nutrien continues to expand its retail division through strategic acquisitions. The sector is ripe for consolidation, and Nutrien is taking advantage of its leadership position in the seed and crop protection markets.

Management raised the dividend by 7.5% for 2019, and investors should see steady annual gains. The stock is off the 12-month low but still appears cheap at the current price of $68 per share. As crop nutrient prices continue to rise, Nutrien has the potential to generate significant free cash flow.

The bottom line

Bank of Nova Scotia and Nutrien are top players in their respective industries and should be solid buy-and-hold picks for a TFSA portfolio. At this point, I would probably split a new investment between the two stocks.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Andrew Walker owns shares of Nutrien. Nutrien is a recommendation of Stock Advisor Canada.

More on Investing

The virtual button with the letters AI in a circle hovering above a keyboard, about to be clicked by a cursor.
Tech Stocks

Emerging Canadian AI Companies With Big Potential

These tech stocks are paving the way to an AI-filled future, but still offer enough growth ahead for a strong…

Read more »

Young Boy with Jet Pack Dreams of Flying
Tech Stocks

Is Constellation Software Stock a Buy, Sell, or Hold for 2025?

CSU stock has long been a strong option for high growth, high value stocks. But are there now too many…

Read more »

rising arrow with flames
Investing

2 Riskier Stocks With High Potential for Canadian Investors in November

Risky stocks such as Well Health Technologies have the potential to provide life-changing long-term returns.

Read more »

hand stacks coins
Dividend Stocks

3 Ultra-High-Yield Dividend Stocks You Can Buy and Hold for a Decade

These three high-yield dividend stocks still have some work to do, but each are in steady areas that are only…

Read more »

senior man and woman stretch their legs on yoga mats outside
Dividend Stocks

TFSA: 2 Canadian Stocks to Buy and Hold Forever

Here are 2 TFSA-worthy Canadian stocks. Which one is a good buy for your TFSA today?

Read more »

Canada day banner background design of flag
Investing

Got $500? 5 Top Canadian Stocks to Buy and Hold

These top Canadian stocks have solid fundamentals with potential to outperform the benchmark index by a wide margin.

Read more »

man touches brain to show a good idea
Energy Stocks

1 No-Brainer Energy Stock to Buy With $500 Right Now

Should you buy a cyclical energy stock at its decade-high? Probably not. But read this before you make a decision.

Read more »

Asset Management
Stocks for Beginners

TFSA: 4 Canadian Stocks to Buy and Hold Forever

Thinking about what to buy with the new TFSA contribution space in 2025? These four Canadian stocks are worth holding…

Read more »