Canadian Tax-Free Savings Account (TFSA) and Registered Retirement Saving Plan (RRSP) investors are looking for good stocks that can ride out the current tariff turbulence impacting the markets. At the same time, it makes sense to consider contrarian picks in segments that have taken a hit but should rebound when markets rebalance.
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Enbridge
Enbridge (TSX:ENB) is up 27% in the past year and trades close to its 12-month high.
The company is benefitting from lower interest rates and the boost to revenue from its US$14 billion acquisition last year of three natural gas utilities in the United States. Enbridge is also working on a $26 billion capital program to drive revenue and cash flow growth. Management expects adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to grow by 7% to 9% through 2026. Distributable cash flow is expected to increase by 3%. This should support continued dividend growth. Enbridge has increased the distribution for 30 consecutive years.
Investors who buy ENB stock at the current price can get a dividend yield of 5.8%.
Suncor Energy
Suncor (TSX:SU) trades near $46.50 at the time of writing compared to a 12-month high of around $58.50. The decline in the price of oil over the past year is largely to blame for the pullback. West Texas Intermediate (WTI) oil trades for close to US$58 per barrel at the time of writing. It was as high as US$83 in the past year.
Suncor is best known for its oil sands production, but the company also owns four large refineries and sells its fuel through Petro-Canada retail locations. Low oil prices are hurting margins on the production operations, but lower input costs for the refineries can lead to larger profits on the sale of refined products. In addition, cheaper gasoline can entice more people to take road trips. Travel within Canada might see a big boost this summer as people avoid heading to the United States.
Suncor just reported good first-quarter (Q1) 2025 results. Production, refining throughput, and sales of refined products all hit record levels in the quarter. The operational improvements indicate that Suncor is making good progress on its turnaround plan.
The company raised the dividend for 2025 and is returning excess cash to investors through share buybacks. At the time of writing, SU stock provides a dividend yield of 4.9%.
Analysts widely expect the oil market to remain in a surplus position through 2025 and into 2026. OPEC recently announced plans to increase supply. This will occur even as China’s economy remains weak, and there is a risk that the United States will slip into a recession if trade disputes are not settled in the near term. As such, additional downside is certainly possible for Suncor and other oil producers. However, the market should eventually recover. In the meantime, you get paid well to wait.
The bottom line on top TSX stocks to consider now
Enbridge and Suncor pay attractive dividends that should continue to grow. If you have some cash to put to work, these stocks deserve to be on your radar.
