2 Beaten-Down Dividend Titans Worth Considering Right Now

Contrarian investors are constantly searching for struggling stocks to add to their self-directed Tax-Free Savings Account or Registered Retirement Savings Plan (RRSP) portfolios focused on dividends and total returns.

Buying unloved stocks takes courage and requires the patience to ride out additional potential downside before the stock recovers. Sometimes the turnaround never happens, so the risks have to be weighed against the potential rewards. However, good companies normally rebound and the upside can be significant.

Canadian National Railway

Canadian National Railway (TSX:CNR) trades near $153 per share at the time of writing compared to nearly $180 two years ago. The stock is up about 13% in 2026 on optimism that things could turn around for the rail sector later this year.

Tariffs and ongoing trade negotiations between Canada, the United States and Mexico are largely responsible for the pain that occurred in 2025. CN said tariffs contributed to a $350 million decline in 2025 revenue as the forestry products and metals segments took a big hit. This is expected to continue to be the case until there is a resolution on the next phase of the Canada-U.S.-Mexico Agreement (CUSMA) facing a July 1, 2026 deadline. Canada-U.S. traffic represents nearly a third of CN’s volume. The company operates roughly 20,000 route miles of tracks connecting the Pacific and Atlantic coasts of Canada to the Gulf Coast in the United States.

Fuel costs are another headwind in the near term that could put a pinch on profits this year if CN isn’t able to fully pass the increases through to customers. High oil prices, if maintained, will also put pressure on the global economy, which would translate into reduced demand for CN’s services.

On the upside, most of the negative news is likely already reflected in the stock price. CN is taking advantage of the weakness to buy back up to 24 million shares under the current repurchase program, which will benefit shareholders over the long run. The business continues to be very profitable and CN has increased the dividend annually for the past 30 years.

Telus

Telus (TSX:T) is definitely a contrarian pick right now. The stock trades near $16.60 at the time of writing, down about 50% from where it sat four years ago, and not far off the recent low around $16.20, a level the stock hasn’t seen in more than a decade.

At the current share price, the dividend yield is about 10%. When dividend yields get this high it often means the market is anticipating a dividend cut. Management tried to calm these concerns late last year when Telus put its dividend-growth plan on hold. This helped push the stock higher in January, but the bears have since regained control.

Price wars in the mobile segment returned in recent weeks, causing analysts to reduce revenue and earnings expectations for the telecom companies. Telus and its peers are also impacted by the drop in newcomers to Canada, particularly international students. Debt is high and interest rates are unlikely to fall further in the near term to provide Telus with any rate relief.

On the positive side, the company still generates strong revenue and cash flow. Telus started the process of monetizing non-core assets to reduce debt. It sold a 49.9% stake in the wireless tower business last year and is currently evaluating options for its Telus Health division.

Telus will get a new CEO on July 1. Victor Dodig, the former CEO of CIBC, could cut the dividend quickly to free up cash to reduce debt. That will upset long-term holders of the stock, but even if the distribution gets trimmed by 50%, the yield will still be attractive based on the current share price, and the market would likely respond positively, given the current anticipation of a reduction.

If the new CEO is able to get debt under control and further streamline the business, there could be meaningful upside for Telus in the next few years.

The bottom line

CN and Telus are solid TSX companies that could rebound over the medium term. If you have some cash to put to work in a contrarian portfolio these stocks deserve to be on your radar.

The post 2 Beaten-Down Dividend Titans Worth Considering Right Now appeared first on The Motley Fool Canada.

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More reading

• Canadian Stocks That Billionaire Investors Have Been Loading Up On
• How to Use Just $10,000 to Turn Your TFSA into a Money-Making Machine
• Create Your Own Portfolio Dividend Yield With These 2 Incredible TSX Stocks
• 10% Yield: Here’s the Dividend Trap to Avoid in April
• How $20,000 Across 4 TSX Stocks Can Deliver $1,000 in Passive Income

The Motley Fool recommends Canadian National Railway and TELUS. The Motley Fool has a disclosure policy. Fool contributor Andrew Walker owns shares of Telus.