Undervalued Canadian Stocks to Consider Now

With the TSX near its record high, dividend investors are wondering which top TSX stocks might still be attractive to buy for a self-directed Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP) portfolio focused on income and long-term total returns.

Canadian Natural Resources

Canadian Natural Resources (TSX:CNQ) is up 40% in 2026, but the stock has pulled back from the March high, giving investors a chance to buy a dip.

The significant rise in oil prices in recent months provided the boost in the first part of this year. News of any deal to reopen the Strait of Hormuz would likely lead to a drop in oil prices and would put some added pressure on oil stocks in the near term, but analysts expect oil prices to remain elevated as it will take time for producers in the Middle East to get supply back on track.

The longer-term story is where investors should focus. CNRL is a major Canadian producer of both oil and natural gas. The Canadian government’s plan to build new pipelines to export more Canadian energy products bodes well for CNRL due to its vast energy reserves across the full spectrum of the product portfolio, including oil sands, conventional light and heavy oil, offshore oil, and natural gas.

CNRL recently raised the dividend, marking 26 consecutive years of dividend hikes. Investors who buy CNQ stock at the current level can get a dividend yield of 3.8%.

Canadian National Railway

Canadian National Railway (TSX:CNR) trades near $153 per share at the time of writing. That’s up from the 12-month low around $126, but it is still way below the $179 it reached in 2024.

Bargain hunters started buying the stock over the past six months on the anticipation of a resolution to the trade negotiations between the United States and Canada. CN said tariffs had a $350 million negative impact on its operations in 2025, which forced the company to abandon its guidance last year.

Near-term volatility should be expected. The Canada-U.S.-Mexico Agreement (CUSMA) has a July 1 deadline for deciding if the three countries will keep it in place, modify it, or end it completely. The deadline is expected to pass without any resolution and it could be some time before things get resolved.

Eventually, however, a deal of some sort will materialize. When that occurs, CN should see a rebound in demand for its services. Businesses will feel more comfortable ordering raw materials and finished goods as they plan investments and restock supplies.

CN remains a very profitable business, despite the recent headwinds, and is using excess cash flow to buy back shares while supporting ongoing dividend increases. The board has increased the dividend in each of the past 31 years.

The bottom line

Additional pullbacks are possible in the coming months, but CNRL and Canadian National Railway should perform well over the long haul. If you have some cash to put to work in a buy-and-hold dividend portfolio, these stocks deserve to be on your radar.

The post Undervalued Canadian Stocks to Consider Now appeared first on The Motley Fool Canada.

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The Motley Fool recommends Canadian National Railway and Canadian Natural Resources. The Motley Fool has a disclosure policy. Fool contributor Andrew Walker has no position in any stock mentioned.