Market Correction: 3 Dividend Stocks to Hold in Your TFSA

Top dividend stocks like Enbridge Inc. (TSX:ENB)(NYSE:ENB) could offer protection in this harsh market correction.

| More on:
Make a choice, path to success, sign

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn moresdf

The S&P/TSX Composite Index was down over 500 points in late-morning trading on June 16. This is the second day this week that the TSX has suffered a +500-point loss. It remains to be seen whether stocks can broadly stage a comeback. In any case, Canadian investors are facing the most challenging market climate since the March 2020 market correction.

Today, I want to look at three dividend stocks that you can trust in your TFSA going forward. Let’s dive in.

This super energy stock can provide big income in a market correction

Enbridge (TSX:ENB)(NYSE:ENB) is the first dividend stock I’d look to snatch up in this market correction. This energy infrastructure giant has delivered over a quarter century of annual dividend growth. Shares of Enbridge have plunged 8.6% week over week at the time of this writing. The stock is still up 7.6% in the year-to-date period.

Investors got to see the company’s first-quarter 2022 results on May 6. It delivered adjusted earnings of $1.7 billion, or $0.84 per common share — up from $1.6 billion, or $0.81 per common share. Enbridge also reported adjusted EBITDA of $4.1 billion compared to $3.7 billion in the previous year.

Shares of this dividend stock last had a favourable price-to-earnings (P/E) ratio of 18. It offers a quarterly dividend of $0.86 per share, which represents a tasty 6.4% yield.

Here’s a dividend stock you can trust for years to come

Hydro One (TSX:H) is a Toronto-based electricity transmission and distribution company. It boasts a monopoly in Canada’s most populous province. Shares of this dividend stock have still increased marginally in the year-to-date period. The stock has dropped 6.2% month over month.

The company unveiled its first-quarter 2022 earnings on May 5. Earnings per share increased 15% year over year to $0.52. Meanwhile, revenues rose to $2.04 billion compared to $1.81 billion in the previous year. Net income attributable to common shareholders came in at $310 million — up from $268 million in the first quarter of 2021. Investors can trust this dependable profit machine in this market correction and for the long haul.

This dividend stock possesses an attractive P/E ratio of 19. Moreover, it offers a quarterly dividend of $0.28 per share. That represents a 3.3% yield.

One more dividend stock to hold in a market correction

Empire Company (TSX:EMP.A) is one of the top grocery retailers in Canada. It owns and operates top brands like Sobeys, Farm Boy, Freshco, Foodland, and others. Grocery retail stocks proved to be a reliable hold during the 2020 market correction. Shares of this dividend stock have increased 5% so far this year.

Investors can expect to see Empire’s fourth-quarter and full-year fiscal 2022 results on June 22. In Q3 FY2022, Empire delivered earnings-per-share (EPS) growth of 16% to $0.77. Meanwhile, its EBITDA margin improved by 50 basis points. Better yet, free cash flow surged 75% year over year to $551 million. Empire stock possesses an attractive P/E ratio of 14. It offers a quarterly dividend of $0.15 per share, which represents a modest 1.4% yield.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Ambrose O'Callaghan has no position in any of the stocks mentioned. The Motley Fool recommends Enbridge.

More on Investing

Investing

KM Throwaway Post

Read more »

Investing

Carlos Test Yoast Metadata

Read more »

Investing

KM Ad Test

This is my excerpt.

Read more »

Investing

Test post for affiliate partner mockups

Updated: 9/17/2024. This post was not sponsored. The views and opinions expressed in this review are purely those of the…

Read more »

Investing

Testing Ecap Error

Premium content from Motley Fool Stock Advisor We here at Motley Fool Stock Advisor believe investors should own at least…

Read more »

Investing

TSX Today: Testing the Ad for James

la la la dee dah.

Read more »

Lady holding remote control pointed towards a TV
Investing

2 Streaming Stocks to Buy Now and 1 to Run From

There are streaming stocks on the TSX that are worth paying attention to in 2023 and beyond.

Read more »

A red umbrella stands higher than a crowd of black umbrellas.
Stocks for Beginners

Top Recession-Resilient TSX Stocks to Buy With $3,000

It's time to increase your exposure to defensives!

Read more »