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3 Top TSX Dividend Stocks on Sale for May 2023

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Image source: Getty Images

Written by Andrew Walker at The Motley Fool Canada

The market correction is giving contrarian investors a chance to buy top TSX dividend stocks at discounted prices for self-directed Tax-Free savings Account (TFSA) and Registered Retirement Savings Plan (RRSP) portfolios.

TC Energy

TC Energy (TSX:TRP) trades near $56 per share. That’s off the $51 the stock dipped to in March but still way down from the $74 the share price hit in early June last year.

The energy sector as a whole has been on a bumpy ride over the past 12 months with investors reacting strongly to moves in commodity prices. Oil and natural gas have both been turbulent, so the shifts in share prices of producers makes sense. TC Energy, however, simply transports the fuels and charges a fee for providing the service, so the change in the price of the commodity has a limited direct impact on revenue.

TC Energy’s main operations focus on the transmission and storage of natural gas. Oil pipelines and power-generation facilities round out the portfolio. The company is dealing with cost issues on a major project, but shareholders now have most of the bad news on the Coastal GasLink development, which is 87% complete. The project will now cost about $14.5 billion — more than double the original estimate. That is tough to swallow for investors, but TC Energy has $34 billion in developments on the go and management still expects cash flow to rise enough in the next few years to support targeted annual dividend increases of at least 3%.

TRP stock appears undervalued right now, and investors can pick up a 6.6% dividend yield.

Bank of Nova Scotia

Bank of Nova Scotia (TSX:BNS) was as high as $86 per share in the past 12 months. The stock is currently around $67, trading for just 9.4 times trailing 12-month earnings.

Bank stocks have been under pressure due to rising fears that soaring interest rates designed to slow the economy could trigger a meaningful recession and a reversal of the hot jobs market. If unemployment jumps while households are still struggling with high food prices and rising mortgage costs, there is a risk that loan defaults could take off.

At the same time, bank failures in the United States caused by deposit flight have rattled investors over the past two months.

More volatility should be expected, but Bank of Nova Scotia remains very profitable and pays an attractive dividend that should be safe. Investors who buy BNS stock at the current level can get a 6% yield.


Suncor (TSX:SU) trades near $40 per share at the time of writing compared to more than $53 last June. Oil’s fall from US$120 per barrel led to a pullback in oil stocks through the second half of last year and the volatility has continued in 2023.

Bears predict a global recession will hammer oil demand in the coming months. Bulls point to tight supply conditions and rising fuel consumption as airlines boost capacity and commuters head back to the office.

At current oil prices, Suncor stock still looks oversold, and investors can now get a 5.2% dividend yield.

The bottom line on cheap dividend stocks to buy now

TC Energy, Bank of Nova Scotia, and Suncor pay attractive dividends that should be safe. If you have some cash to put to work in a TFSA or RRSP, these stocks appear undervalued and deserve to be on your radar.

The post 3 Top TSX Dividend Stocks on Sale for May 2023 appeared first on The Motley Fool Canada.

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The Motley Fool recommends Bank Of Nova Scotia. The Motley Fool has a disclosure policy. Fool contributor Andrew Walker has no position in any stock mentioned.