Business & Investment

Two Top Canadian Stocks to Start Your RRSP

RRSP is for Canadian savers retirement A fund that can provide income to supplement government and corporate pensions.

Benefits of RRSP

RRSP contributions are used to reduce taxable income for a given tax year. This has the greatest benefit if the investor is at a higher marginal tax rate. You can defer the tax you should have paid until the funds are deleted. Ideally, a small tax plan will result in cash being withdrawn from the RRSP at a lower tax rate. In addition, the money you can hold as a result of tax savings is far more purchasing power today than in the future, so it makes sense to maximize RRSP’s contribution if possible.

Take a look at the two top RRSP stocks to put into your voluntary portfolio.

Bank of Montreal

Bank of Montreal (TSX: BMO)(NYSE: BMO) He paid his first dividend in 1829 and has been giving investors a portion of his profits every year since that day. Reliable dividends are important for RRSP investors who use payments to acquire additional shares.

Banks are well-suited to exposure to economic recovery in both Canada and the United States. Bank of Montreal has a large American presence with a strong commercial banking sector. This bank has less exposure to the Canadian housing market than other banks and may be considered a safer choice in this sector if housing collapse appears to be imminent.

Investors buying now can get a dividend yield of 3.3%. While other stocks offer higher yields and stock prices aren’t cheap after well below the 2020 lows, the Bank of Montreal is a great place to increase dividends, buy back shares, or make strategic takeovers. We are sitting on a fair amount of surplus cash that provides flexibility to promote the future growth of our US business.

Canadian National Railway

CN (TSX: CNR)(NYSE: CNI) Is a leader in the North American rail industry with its own rail network connecting three coastal ports.The company is trying to buy Southern Kansas City In the United States, there is a move to add strategic US routes and Mexican routes.

Investors have punished shares in recent months because of uncertainties in the outcome of the bid, but the pullback seems overkill. Once the deal is signed, CN will be the dominant railroad with a wide range of competitive moats that will last for decades. Otherwise, the company remains a highly profitable player with a strong business that generates significant free cash flow.

CN has a great track record of dividend growth and long-term equity holders are enjoying great returns. Equities now appear to be undervalued and CN deserves to be the core holding of any RRSP portfolio.


Bank of Montreal and CN are Canada’s top companies worthy of anchor positions in diversified RRSP funds. If you buy only one, I will now make CN the first choice to start your voluntary pension.

This article represents the opinion of a writer who may disagree with the “official” recommendation position of the Motley Fool Premium Services or Advisors. We are Motley! Asking investment treatises, even our own treatises, can help you think critically about your investment and make decisions to be smarter, happier, and richer. As a result, we may publish articles that may not match recommendations, rankings, or other content. ..

The Motley Fool recommends the Canadian National Railway. A stupid contributor, Andrew Walker owns a stake in the Canadian National Railway.

Two Top Canadian Stocks to Start Your RRSP Two Top Canadian Stocks to Start Your RRSP

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