Potential Bull Run: 2 Top Bargain Stocks on the TSX

The unexpected rebound on the TSX in late 2023 surprised many dividend-focused investors, leaving them to ponder which Canadian dividend stocks still offer value for inclusion in a Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP). Here, we explore two undervalued TSX dividend stocks that could be enticing for investors seeking income and potential total returns.


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1. Enbridge (TSX:ENB)

Trading around $48, Enbridge presents an attractive opportunity compared to its peak of $59 in 2022. While recognized as a prominent oil pipeline operator in Canada and the United States, Enbridge has diversified its portfolio with renewable energy and natural gas divisions. Future growth is anticipated to be driven significantly by these segments.


Enbridge's strategic moves include the pending acquisition of three natural gas utilities in the United States for US$14 billion, positioning the company as the largest natural gas utility in North America. Additionally, Enbridge has ventured into the renewable energy sector, acquiring a solar and wind project developer to bolster its existing portfolio.


With a $25 billion capital program, Enbridge aims to enhance revenue and cash flow, supporting its dividend, which has seen annual increases for 29 consecutive years. Currently offering a 7.6% dividend yield, Enbridge could benefit from central bank interest rate cuts, further aiding its recovery.

2. Bank of Nova Scotia (TSX:BNS)

Priced around $62.50, Bank of Nova Scotia has seen a decline from its $93 peak approximately two years ago. The dip is attributed to concerns over potential loan losses amid rising interest rates and economic challenges. Despite these worries, the bank maintains a robust loan portfolio and remains profitable.


Bank of Nova Scotia's proactive measures, including a 3% staff reduction in the previous year, are expected to positively impact expenses in fiscal 2024. The bank's new CEO is driving a strategic shift to enhance shareholder returns, addressing the recent underperformance relative to peers.


Investors purchasing BNS stock at its current level can enjoy a 6.8% dividend yield. While volatility may persist until interest rates decrease, these undervalued stocks could offer lucrative gains for patient investors, providing an attractive dividend while awaiting market shifts.


In conclusion, Enbridge and Bank of Nova Scotia present compelling investment opportunities, combining undervaluation with strong dividend prospects. These stocks, with their potential for growth and income, could be well-suited for investors navigating the ever-changing market conditions.
Location: Canada

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