The market correction is giving traders an opportunity to purchase prime TSX dividend shares at discounted costs for self-directed Tax-Free Financial savings Account (TFSA) portfolios targeted on passive earnings. Falling share costs are powerful to observe, however they drive up the dividend yields retirees and different earnings traders can get on nice Canadian shares.

Financial institution of Nova Scotia

Financial institution of Nova Scotia (TSX:BNS) is Canada’s fourth-largest financial institution with a present market capitalization close to $79 billion. The inventory went right into a steep slide by way of the again half of final yr amid a broader pullback within the financial institution sector and has remained underneath strain. Financial institution of Nova Scotia trades close to $66.50 per share on the time of writing in comparison with a 12-month low round $63 and the 12-month excessive above $83.

Contrarian traders would possibly wish to begin nibbling on BNS inventory whereas it’s out of favour. Financial institution of Nova Scotia introduced in a brand new chief government officer (CEO) this yr who’s conducting a strategic overview of the enterprise and is predicted to announce overhaul plans later within the yr or in early 2024.

One space of focus would be the worldwide group that has massive operations within the Pacific Alliance commerce bloc markets of Mexico, Peru, Chile, and Colombia. Buyers haven’t seen the anticipated returns materialize from the large bets on Latin America. The 4 international locations supply engaging long-term progress potential, however political and financial volatility are fixed threats.

In an handle to shareholders, the brand new CEO hinted that Mexico would possible stay an necessary marketplace for Financial institution of Nova Scotia. If property within the different three international locations are monetized will probably be attention-grabbing to see if the main focus will shift to the US or different markets.

Financial institution of Nova Scotia stays very worthwhile and has a strong capital place to experience out near-term market turbulence. The dividend ought to be secure and now gives a 6.2% yield, so that you receives a commission effectively to attend for a rebound.

BCE

BCE (TSX:BCE) traded for $73 in April on the peak final yr earlier than sliding to $57 in October. The inventory has since recovered some floor and is again as much as $63 on the time of writing.

Earnings traders have owned BCE for many years, and there may be little purpose for that to alter. The general income stream stays recession-resistant, though the media group is extra inclined to a weakening financial system as advertisers are inclined to trim advertising and marketing budgets when they should protect money movement.

The enormous wireline and wi-fi community operations, nonetheless, nonetheless generate the majority of gross sales. Companies and households want to keep up their web and cell subscriptions whatever the state of affairs within the financial system. In consequence, BCE ought to be a superb inventory to personal if you’re anxious {that a} significant financial downturn is on the way in which.

BCE invests closely in community upgrades to guard its market place and drive future income progress. In actual fact, the corporate spent roughly $5 billion in 2022 on tasks that embody the enlargement of the 5G community and BCE’s fibre-to-the-premises wireline initiative.

Earnings are anticipated to dip in 2023 because of larger bills, however complete income and free money movement are projected to be above 2022 ranges. This could assist one other first rate dividend improve in 2024. BCE usually raises the payout by about 5% per yr. On the time of writing, the inventory supplies a 6.1% dividend yield.

The underside line on prime shares for prime dividend yields

Financial institution of Nova Scotia and BCE pay engaging dividends that ought to proceed to develop. When you’ve got some money to place to work in a portfolio targeted on passive earnings, these shares look low-cost immediately and should be in your radar.