Canadian investors will get another $7,000 in Tax-Free Savings Account (TFSA) contribution room in 2025. Retirees seeking passive income and other investors focused on total returns are wondering which TSX dividend stocks might be good to buy in 2025.
Fortis
Fortis (TSX:FTS) recently raised its dividend by 4.2%. This is the 51st consecutive annual increase in the distribution.
Steady dividend growth supported by rising revenue and stronger cash flow tends to also drive share prices higher over the long term, as has been the case with Fortis.
The company grows through a combination of strategic acquisitions and internal development projects. The current $26 billion capital program is expected to boost the rate base from $38.8 billion in 2024 to $53 billion in 2029. As the new assets are completed and go into service, Fortis expects cash flow to improve enough to support planned annual dividend increases of 4% to 6% over five years.
Falling interest rates could help new projects get the green light. Lower borrowing costs might also spark a flurry of consolidation in the utility sector.
Investors who buy FTS stock at the current level can get a dividend yield of 4%.
Canadian Natural Resources
Canadian Natural Resources (TSX:CNQ) raised its dividend in each of the past 25 years. The latest increase announced for 2025 is 7%.
CNRL's ability to deliver solid revenue and cash flow through the oil and natural gas price cycles lies in its diversified product portfolio. CNRL is widely known for its oil sands operations, but the company also produces conventional heavy oil, conventional light oil, offshore oil, natural gas liquids, and natural gas.
The oil market faces some headwinds over the near term, with weak demand in China and growing production from non-OPEC countries like Canada and the United States, which are likely to put pressure on the price of oil through next year. The pullback in oil prices over the past eight months is largely the reason CNQ stock is down from $56 in April to the current price below $46 per share.
Natural gas prices, however, are near their 12-month highs and strong demand for natural gas is expected over the coming years as countries build more gas-fired power generation facilities to meet rising electricity demand.
Investors who buy CNQ stock at the current level can get a dividend yield of 4.9%.
Bank of Nova Scotia
Bank of Nova Scotia (TSX:BNS) is in a transition phase. The bank is redirecting investment capital from South America, where it focused heavily in the past, to the United States and Canada, where it sees better opportunities to drive investor returns.
The bank already announced a US$2.8 billion deal to buy a 14.9% stake in KeyCorp, a U.S. regional bank. The move gives Bank of Nova Scotia a foothold to expand its American presence. In Canada, Bank of Nova Scotia recently created a new executive position to lead an expansion in Quebec.
Investors will need to be patient, but you get paid a solid 5.4% dividend yield right now to wait for the turnaround plan to deliver results.
The bottom line on top TSX dividend stocks
Fortis, CNRL, and Bank of Nova Scotia are good examples of top Canadian dividend stocks to consider for a self-directed TFSA focused on dividends and long-term total returns. If you have some cash to put to work, these stocks deserve to be on your radar.
