Market Crash: 2 Top Dividend Stocks to Buy Today

Two top dividend stocks in the TSX Index are cheap to buy today. Investors can now get 6-8% dividend yields from some of Canada’s best stocks.

| More on:

Top dividend stocks become more attractive when the broader stock market takes a dive.

Many people missed the rally after the market crash in March, but the the September correction provides an opportunity to add some of Canada’s best dividend stocks to your TFSA retirement income fund or RRSP portfolio.

Bank of Nova Scotia is one of Canada’s oldest top dividend stocks

Bank of Nova Scotia (TSX:BNS)(NYSE:BNS) paid its first dividend in 1832. The bank survived every major economic and geopolitical crisis since then, including two world wars, the Great Depression, and the Great Recession.

COVID-19 poses challenges for Bank of Nova Scotia and its peers, but Canada’s third-largest bank will survive the pandemic. In addition, the dividend should be safe.

Bank of Nova Scotia remains very profitable, even with elevated provisions for credit losses (PCL) during these difficult times. The international group might take longer to recover due to the heavy focus on Latin America. However, Canada normally contributes roughly two-thirds of profits, and the Canadian economy is recovering at a steady pace.

Bank of Nova Scotia trades for less than $54 per share at the time of writing. This is the cheapest price for the stock since May. Investors who buy today can pick up a solid 6.7% dividend yield and simply ride out the pandemic. The stock traded above $74 earlier this year, so there is decent upside potential on a recovery.

Why Enbridge is one of Canada’s top dividend stocks

Enbridge (TSX:ENB)(NYSE:ENB) stock is heavily out of favour, yet the company continues to be one of the top dividend stocks in the TSX Index.

The energy infrastructure giant certainly faces some growth challenges on major pipelines developments. In addition, the pandemic lockdowns hammered demand for fuel in recent months. Enbridge isn’t an oil producer or a refiner, but it moves crude oil between the two groups.

Jet fuel, gasoline, and diesel fuel usage dropped significantly in recent months. Airlines continue to face difficult times, but people are driving again, and commercial trucks are back on the roads. Once COVID-19 vaccines become widely available, demand for flights should improve, and many commuters will head back to offices.

Enbridge has utility and renewable energy assets that provide steady revenue and cash flow. The company also has more than $10 billion in secured capital projects underway to support revenue growth. Enbridge stock appears oversold today at $39 per share and provides a juicy 8.25% yield.

top dividend stocks - Enbridge

Enbridge completed a restructuring process before the pandemic arrived. The company sold roughly $8 billion in non-core assets and streamlined the business. This means it entered 2020 with a solid balance sheet and an asset base that primarily generates revenue from regulated businesses.

Management confirmed the 2020 guidance for distributable cash flow when Enbridge reported Q2 2020 earnings results. As such, the dividend payout should be safe.

Enbridge’s stock topped $55 per share at one point in February, so there is an opportunity to book some significant gains when the market stabilizes.

The bottom line

Investors should anticipate ongoing volatility in the coming months. However, Bank of Nova Scotia and Enbridge now trade at stock prices that appear oversold. The two remain top dividend stocks for income and RRSP investors. Distributions might not increase in the next year, but they appear stable and offer attractive yields.

The shares should trade meaningfully higher five years from now and investors can collect decent income while they wait for the rebound.

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.

The Motley Fool owns shares of and recommends Enbridge. The Motley Fool recommends BANK OF NOVA SCOTIA. Fool contributor Andrew Walker owns shares of Enbridge.

More on Dividend Stocks

Canadian dollars in a magnifying glass
Dividend Stocks

3 High-Yield Dividend Stocks That Are Screaming Buys Right Now

Are you looking for great income stocks? Here's a trio of high-yield dividend stocks that pay insane yields right now.

Read more »

Piggy bank with word TFSA for tax-free savings accounts.
Dividend Stocks

Transform a $5,000 TFSA Into a $50,000 Retirement Nest Egg

The TFSA is a powerful tool that can grow a small investment into a substantial retirement nest egg over time.

Read more »

A meter measures energy use.
Dividend Stocks

Is Fortis Stock a Buy, Sell, or Hold for 2025?

Fortis has increased its dividend annually for the past five decades.

Read more »

analyze data
Dividend Stocks

3 Dividend Stocks That Are Screaming Buys in November

Here are three top dividend stocks long-term investors won't want to ignore during this part of the market cycle.

Read more »

senior relaxes in hammock with e-book
Dividend Stocks

Generate $175/Month in Passive Income With a $30,000 Investment

Dividend aristocrats offer reliability, and many of them also offer generous yields. With sizable enough discounts, these yields can become…

Read more »

dividends can compound over time
Dividend Stocks

Best Dividend Stocks to Buy Now for Canadian Investors

These three stocks would be excellent additions to your portfolios, given their solid underlying businesses, consistent dividend growth, and healthy…

Read more »

data analyze research
Dividend Stocks

3 Undervalued Stocks to Watch in November

Not all undervalued and discounted stocks are destined or poised to make a comeback soon, and a protracted timeline can…

Read more »

TFSA (Tax free savings account) acronym on wooden cubes on the background of stacks of coins
Dividend Stocks

The Perfect TFSA Stocks for Long-Term Growth

Two industry heavyweights are perfect stock holdings in a TFSA for long-term money growth.

Read more »