By Andrew Walker at The Motley Fool Canada
Canadian retirees who use their Tax-Free Savings Account (TFSA) to generate passive income are wondering which top TSX dividend stocks still might be attractive in a market that looks increasingly overbought.
Enbridge
Enbridge (TSX:ENB) is up nearly 30% in the past year, but investors who buy the stock at the current price can still pick up a 4.9% dividend yield.
The company is benefitting from strong domestic and global demand for North American energy products as foreign buyers seek out reliable supplies of oil and liquified natural gas (LNG) in the wake of the disruptions caused by wars in Ukraine and Iran. Enbridge owns the largest oil export terminal in Texas and is a partner in the Woodfibre LNG export facility nearing completion on the coast of British Columbia.
Enbridge’s existing oil and natural gas pipelines move fuel from producers to refineries, utilities, and export sites. The company’s renewable energy division is busy building wind and solar installations to provide green energy to tech firms.
In total, Enbridge has a $40 billion capital program on the go that will drive growth in revenue and adjusted earnings in the next few years. This should enable the board to steadily increase the dividend. Enbridge raised the distribution to shareholders in each of the past 31 years.
Canadian Natural Resources
Canadian Natural Resources (TSX:CNQ) trades near $64 at the time of writing. The stock has moved higher in the past two weeks after pulling back from the 2026 high around $70.
Oil prices will likely remain volatile in the coming weeks and months as the U.S. and Iran work towards a sustainable agreement to let ships move freely through the Strait of Hormuz. The long-term prospects for CNRL, however, should be positive regardless of what happens in the Middle East.
CNRL is a major Canadian oil and natural gas producer with diversified assets and significant reserves. Rising export capacity in Canada bodes well for the company as it will be able to sell more energy products to international buyers.
CNRL raised the dividend in each of the past 26 years. Investors can currently get a dividend yield of close to 4%.
Fortis
Fortis (TSX:FTS) has a dividend yield of just 3% right now, but the stock remains attractive for income investors who want to receive reliable and growing dividend income.
Fortis is working on a $28.8 billion capital program that will boost the rate base from roughly $42 billion to nearly $58 billion over five years. The expansion of revenue and adjusted earnings should support management’s plan to increase the dividend by 4% to 6% per year through at least 2030. Fortis has given investors a raise in each of the past 52 years.
Bank of Nova Scotia
Bank of Nova Scotia (TSX:BNS) isn’t as cheap as it was two years ago, but the company continues to make progress on a turnaround plan. The business is becoming more efficient and return on equity (ROE) is improving at a steady pace. Higher revenue and profits should support the multiple expansion on the share price, along with dividend increases.
Investors can currently pick up a 3.7% dividend yield from the stock.
BCE
BCE (TSX:BCE) has been in a painful slump over the past four years. The share price has fallen from $74 to the current price near $30. Management cut the dividend last year to preserve cash flow and is working to reduce expenses while investing in new opportunities to rebuild the business.
This is a contrarian pick in a tough market for communication companies. However, as a dividend choice, BCE has become interesting at this level. Most of the pain should already be priced into the share price at this point, and the distribution should be safe. Investors currently get a 5.8% yield on the stock, so you get paid well to wait for a rebound.
The bottom line
Enbridge, CNRL, Fortis, Bank of Nova Scotia, and BCE pay attractive dividends. If you have some cash to put to work in a diversified dividend portfolio targeting passive income these stocks deserve to be on your radar.
The post 5 TSX Dividend Stocks for Steady Cash Flow in Any Market appeared first on The Motley Fool Canada.
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The Motley Fool recommends Bank of Nova Scotia, Canadian Natural Resources, Enbridge, and Fortis. The Motley Fool has a disclosure policy. Fool contributor Andrew Walker has no position in any stock mentioned.
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