Canadian Investors Harness Compounding Power with TSX Dividend Stocks

Canadian investors are utilizing their self-directed Registered Retirement Savings Plan (RRSP) accounts to build funds that can provide retirement income to complement Old Age Security, Canada Pension Plan, and work pensions.

One strategy involves buying top TSX dividend stocks and reinvesting the distributions in new shares to harness the power of compounding. Canadian Natural Resources (TSX:CNQ) is a major player in the Canadian energy market with diverse assets including oil sands, offshore oil, conventional heavy oil, conventional light oil, natural gas liquids, and natural gas production.

At $66 per share at the time of writing, CNRL has been as low as $41 and topped out above $70 in the past 12 months. The company relies on oil and natural gas prices to determine its profit margin, but it has a low relative production cost that enables it to make good money even during leaner periods.

Enbridge (TSX:ENB) is another top TSX dividend stock with a strong track record of increasing dividends. With a current price near $70 per share and a dividend yield of 5.5%, Enbridge has been raising its dividend in each of the past 31 years.