Kalkine Media - For investors seeking to bolster passive income within their Tax-Free Savings Account (TFSA) or aiming for robust returns in a self-directed Registered Retirement Savings Plan (RRSP), the beginning of 2024 presents an opportune moment. The Toronto Stock Exchange (TSX) offers an array of dividend stocks, some of which are currently trading at discounted prices, providing an attractive entry point. Here, we delve into two prominent TSX dividend stocks that analysts identify as compelling opportunities for income-focused portfolios:
1. Enbridge (TSX:ENB) (TSX:ENB)
Enbridge stands as a North American energy infrastructure giant, boasting a market capitalization exceeding $100 billion. The company's diverse assets encompass oil pipelines, natural gas transmission and distribution, renewable energy, and export businesses. Despite a challenging 2023 for ENB stock, marked by a drop from its 2022 high of around $59 to the current level of approximately $48, Enbridge remains robust fundamentally.
Enbridge anticipates steady growth in distributable cash flow (DCF) and earnings, supported by a $25 billion capital program and strategic acquisitions. The company's commitment to shareholder returns is evident in its 29th consecutive annual dividend increase, with a 3.1% raise for 2024. The recent share price decline can be attributed to rising interest rates, impacting Enbridge's profit margins due to increased borrowing costs. However, with market expectations of potential interest rate cuts in 2024, ENB's high dividend yield of 7.6% becomes an enticing proposition for investors.
2. TC Energy (TSX:TRP) (TSX:TRP)
TC Energy, a prominent player in natural gas transmission with operations spanning Canada, the United States, and Mexico, represents another compelling dividend stock on the TSX. The company, which also engages in oil pipelines and power generation, faced challenges in 2023, notably with the Coastal GasLink project. Despite these setbacks, TC Energy strategically sold a stake in its American assets, generating $5.3 billion to strengthen its financial position.
TC Energy's positive performance in 2023 positions it as an attractive investment, and the planned spin-off of its oil pipeline business in 2024 aims to unlock further value for investors. Trading at approximately $52, up from $45 in October 2023, TC Energy offers a dividend yield of 7.1%. With a track record of over two decades of annual dividend increases, TC Energy remains committed to delivering shareholder value.
In conclusion, Enbridge and TC Energy, with their discounted stock prices and robust dividend yields, present promising opportunities for investors seeking income in 2024. As the market dynamics evolve, these TSX dividend stocks warrant consideration for those looking to capitalize on discounted entry points and the potential for future dividend growth.