Retirees and other dividend investors seeking passive income and decent total returns are wondering which TSX dividend stocks might still be priced at reasonable levels and are good to buy for a self-directed Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP) portfolio.

Bank of Nova Scotia

Bank of Nova Scotia (TSX:BNS) is up 24% this year to almost $79 per share, but the stock is still well below the $93 it reached in early 2022 before bank stocks went into an extended decline.

The pullback that occurred in 2022 and through most of 2023 came as a result of surging interest rates in Canada and the United States. Investors worried that the central banks would drive the economy into a recession as they battled to get inflation under control. Normally, higher interest rates are good for banks due to the extra net interest margins the banks can generate. However, the steep jump in rates that occurred over such a short period of time drove up provisions for credit losses (PCL) at Bank of Nova Scotia and its peers as borrowers with too much debt ran into trouble.

That story isn't over, but reductions in interest rates by the Bank of Canada and the U.S. Federal Reserve in recent months will ease pressure on struggling businesses and households with variable-rate loans. Rates for fixed-rate mortgages are also down from their highest levels.

As long as the economy holds up and unemployment remains stable, PCL should trend lower at the banks in the coming quarters. There is a risk, however, that inflation could creep up again in 2025 in the United States, forcing the central bank to put rate cuts on hold. Bond yields are already moving higher on the anticipation that this could occur. That could put a floor under rates for fixed-rate loans.

Canadian banks and other lenders have roughly 1.2 million mortgages coming due in 2025, according to Canada Mortgage and Housing Corporation (CMHC). Most of these loans carry interest rates that are significantly lower than the rates currently available in the market. If unemployment moves higher and interest rates remain elevated, there could be some pain on the way for the banks.

Despite the potential near-term headwinds, investors should still be comfortable owning Bank of Nova Scotia over the long haul. At the time of writing, the stock provides a dividend yield of 5.4%.

Enbridge (TSX:ENB) is up 25% in 2024 and recently hit a multi-year high. Despite the big rally, the stock still provides a 6% dividend yield for investors who buy at the current level.

Enbridge is a major player in the North American energy infrastructure sector. The company moves roughly 30% of the oil produced in Canada and the United States. It also transports about 20% of the natural gas used by American homes and businesses. The oil and natural gas pipeline systems remain strategically important, and Enbridge has also diversified its asset portfolio in recent years to take advantage of emerging opportunities. The company invested in export facilities, renewable energy, and additional natural gas utilities.

Looking ahead, the $24 billion capital program should drive revenue and cash flow growth to support ongoing dividend increases. Enbridge raised the dividend in each of the past 29 years.

The bottom line on high-yield dividend stocks

Bank of Nova Scotia and Enbridge 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.