In the current market environment, with the Toronto Stock Exchange (TSX) near record highs and increasing economic uncertainty, a prudent strategy for Canadian investors seeking dividend income and total return within their Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP) is to seek out companies with a reliable track record of maintaining dividend payments across various phases of the economic cycle.
Enbridge is a giant in North American energy infrastructure. With its stock price around $66 per share at the time of writing, below its 12-month high of approximately $70, it presents a potential buying-on-the-dip opportunity for investors. The company boasts not only an extensive network of oil and natural gas pipelines but also operations in energy export facilities, natural gas distribution, and renewable power generation.
The company’s growth is driven by a combination of acquisitions and internal projects. For instance, in 2024, Enbridge acquired three U.S. natural gas utilities for $14 billion, and its current capital project backlog stands at a substantial $32 billion, laying a solid foundation for future growth. Most notably, ENB stock has increased its dividend annually for the past 30 years, demonstrating exceptional payout stability. Investors can currently enjoy a attractive dividend yield of up to 5.7%.
Canadian Natural Resources is another dividend stock worth watching, with its share price near $42 at the time of writing. The stock reached a high of around $55 per share in 2024 but has since pulled back due to weaker oil prices. Currently, West Texas Intermediate (WTI) crude is hovering around $57 per barrel, significantly lower than last year’s levels of around $80 per barrel.
Despite facing demand headwinds from challenges in China’s economy and a potential U.S. recession, Canadian Natural Resources has maintained sound profitability. The company’s resilience stems partly from its low operating costs, with a stated WTI break-even price between $40 and $45 per barrel. Meanwhile, production continues to rise through acquisitions and successful drilling projects, with the new revenue effectively helping to offset pressure from tightening margins. Furthermore, the anticipated future start-up of new pipeline capacity to Canadian export facilities is expected to provide a long-term boost to its oil and gas segment. For patient investors, the stock appears attractive at current levels, offering a solid dividend yield of up to 5.5%, and the company has increased its dividend annually for the past 25 years.
In summary, both Enbridge and Canadian Natural Resources possess strong track records of dividend growth, and their dividends are expected to continue growing in the future. For investors with idle cash seeking to add robust sources of income to their portfolios, these two TSX stocks are undoubtedly worthy of close attention.
