Canadian investors are searching for top TSX stocks to add to their self-directed Registered Retirement Savings Plan (RRSP) portfolios focused on dividends and total returns. With the TSX near a record high, it makes sense to look for stocks with long track records of delivering dividend growth.
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Bank of Nova Scotia
Bank of Nova Scotia (TSX:BNS) trades near $72 per share at the time of writing. Investors who bought the stock near $55 last fall are already sitting on nice gains, but the share price is still way off the $93 it reached in early 2022.
Bank of Nova Scotia recently announced a US$2.8 billion investment for a 14.9% stake in KeyCorp, a U.S. bank. Management has also signalled an interest in growing Bank of Nova Scotia’s presence in Quebec, where is sees opportunities for expansion.
Under its new CEO, Bank of Nova Scotia is shifting its growth focus away from South America to opportunities in the United States, Canada, and Mexico. The move could attract investors who have avoided the stock in the past due to the perceived risks connected to the large investments in Colombia, Peru, and Chile.
Investors who buy BNS stock at the current level can get a 5.9% dividend yield.
Canadian Natural Resources
Canadian Natural Resources (TSX:CNQ) just announced a $6.5 billion cash deal to purchase Athabasca Oil Sands and Duvernay Shale assets from Chevron. The transaction is expected to close in Q4 2024 and will be immediately accretive for CNRL. Investors will get a 7% dividend increase starting in January.
CNRL is unique in the Canadian oil patch in that it has been able to maintain annual dividend increases for more than two decades, despite the volatility in the energy sector. This is largely due to the diversified asset base that includes oil sands, conventional heavy oil, conventional light oil, offshore oil, natural gas, and natural gas liquids. In addition, CNRL tends to be the sole or majority owner of most of its assets. This gives management the flexibility to quickly move capital around the portfolio to take advantage of the best opportunities in the market.
Investors who buy CNQ stock at the time of writing can get a dividend yield near 4.25%.
Fortis
Fortis (TSX:FTS) raised its dividend in each of the past 50 years. The board plans to increase the distribution by 4% to 6% annually through 2028, supported by the current $25 billion capital program. Fortis has other projects under consideration that could get added to the development backlog. The company also has a history of making successful strategic acquisitions to boost growth.
Falling interest rates in Canada and the United States should continue to provide support for utility stocks heading into 2025. Fortis owns and operates about $69 billion in assets in Canada, the United States, and the Caribbean. The businesses include power generation, electricity transmission, and natural gas distribution utilities.
The bottom line on top TSX dividend stocks for RRSP investors
Near-term volatility should be expected, given the lofty levels of the markets. However, Bank of Nova Scotia, CNRL, and Fortis pay good dividends that should continue to grow. If you have some cash to put to work, these stocks still look attractive for a buy-and-hold portfolio and deserve to be on your radar.
