Retirement planning: 2 best TSX stocks to buy now for your RRSP

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Canadian savers are now looking for the best Toronto Stock Exchange stocks to add to their RRSP portfolios.

Fortis

Fortis (TSX: FTS) (NYSE: FTS) may not be the most attractive company to hold in your RRSP, but the growth in dividends of the company and its total return to investors over the years makes it a rock star.

Fortis has $ 56 billion in utility assets in Canada, the United States and the Caribbean. The company has grown through a combination of strategic acquisitions and internal development projects. Fortis is currently working on a $ 19.6 billion investment program that will run from 2020 to 2025 and increase the rate base by about a third.

Additional projects are under study and could form part of the current development portfolio. The board plans to increase the dividend by an average annual rate of 6% through 2025. Investors should feel comfortable with the directions. Fortis has just increased distribution for the 48th consecutive year.

The last major acquisition took place in 2016, when Fortis bought ITC Holdings for US $ 11.3 billion. The integration of the transmission companies went according to plan and it would not be surprising to see Fortis close another transaction in the near term. The company recently added an investment banker who has worked with Fortis on previous transactions at the senior ranks.

The stock has not hit 2021 highs, giving investors the opportunity to buy Fortis if it goes down. At the time of writing, the stocks offer a 3.9% dividend yield.

A $ 10,000 investment in Fortis 20 years ago would be worth approximately $ 105,000 today with dividends reinvested.

Telus

Telus (TSX: T) (NYSE: TU) is a major player in the Canadian communications industry with a current market capitalization of $ 35 billion. The company provides mobile, Internet and television services to its customers over its world-class wireless and wireline networks.

The demand for broadband is increasing as people communicate and access content on multiple platforms. Telus knows it has to keep pace and is making the necessary investments to protect its competitive advantages. The company has spent $ 1.9 billion on new spectrum to support the expansion of its 5G network, and Telus continues to install fiber optic lines to replace old copper lines.

Telus also has a knack for taking advantage of opportunities to leverage its assets in other industries. Telus Health is a leading provider of digital health solutions to healthcare professionals, insurance companies and hospitals. Revenue has skyrocketed over the past 18 months and the trend towards virtual care is expected to continue.

Telus Agriculture is another group to watch. The division helps farmers use digital technology to improve the efficiency of their operations, from fields throughout the supply chain to point of sale.

Subsidiaries could potentially be derived as IPOs to maximize shareholder value. Telus International’s IPO earlier this year was a success.

Telus expects its capital spending to peak next year or 2023. That should free up more cash for distributions. The company generates strong cash flow to support payments and dividend growth is expected to be around 8-10% per year.

Investors who buy the stock at the current stock price can earn a 4.5% dividend yield.

A $ 10,000 investment in Telus 20 years ago would be worth around $ 115,000 today with dividends reinvested.

The net result on the main RRSP shares

Fortis and Telus are the primary stocks on the TSX that are expected to continue to provide strong total returns to buy and hold RRSP investors. If you have the money to work for, these stocks are worth on your shopping list.


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