Canadian investors are searching for top picks to add to their TFSA holdings.

Let’s take a look at Enbridge Inc. (TSX:ENB)(NYSE:ENB) and Toronto-Dominion Bank (TSX:TD)(NYSE:TD) to see if one is a better bet right now.


Enbridge took a hit last year as investors bailed out of any name connected to the energy sector.

Concerns about a short-term slowdown in demand for new infrastructure are certainly warranted, but Enbridge has a strong portfolio of development projects to keep it busy until the oil sector recovers.

In fact, Enbridge plans to put $18 billion in new assets into service over the next three years. That should push revenue and cash flow up enough to support dividend increases of about 10% per year.

Enbridge has raised its distribution every year for more than two decades, so investors should be comfortable with the dividend outlook. The current quarterly payout of $0.53 per share yields 3.9%.

Most of the company’s revenue is tied to long-term contracts with the oil industry’s strongest players. Throughput remains strong, and less than 5% of the company’s overall revenue is directly impacted by changes in energy prices.


TD reported fiscal Q2 2016 net income of $2.05 billion, up from $1.86 billion in the same period last year. The results are rather impressive given the challenges facing the Canadian banks right now.

Much of the success can be attributed to the company’s strong retail banking operations. In Canada, TD regularly wins customer service awards, and anyone who is a TD customer knows the branch employees are always on the lookout for opportunities to sell new products and services.

TD’s American branch network is actually larger than the Canadian operation, and U.S.-based earnings are providing a great hedge against tough times in Canada. The U.S. group delivered a 21% year-over-year increase in Q2 earnings, driven by a stronger greenback.

Some investors are concerned about oil risks and the threat of FinTech competition.

Less than 1% of TD’s loan book is directly exposed to the energy sector, so there is little to worry about on that front.

The banking industry is definitely facing challenges from mobile payment operators, but TD has the resources to fight the battle and is securing partnerships with FinTech companies to ensure it stays ahead of the curve.

TD has a great track record of dividend growth. The current quarterly payout of $0.55 per share yields 3.9%.

Which should you buy?

Both stocks deserve to be in any TFSA portfolio. If you only have the cash to buy one, I would go with Enbridge today. The company will probably deliver better dividend growth than TD over the next few years and likely offers more upside potential.

Just released! One top stock for 2016 and beyond

Exports of liquefied natural gas could be one of the best growth opportunities out there for long-term investors. And, we think we've identified the Canadian company to invest in. It's a global company with operations across nearly 20 countries and 70 locations. We like it so much, we've named it as 1 Top Stock for 2016 and Beyond. To find out why, click here now to learn how to access your FREE copy today!


Let’s not beat around the bush – energy companies performed miserably in 2015. Yet, even though the carnage was widespread, not all energy-related businesses were equally affected.

We've identified an energy company we think offers one of the best growth opportunities around. While this company is largely tied to the production of natural gas, it doesn't actually produce the gas. Instead, it provides the equipment required to get natural gas from the ground to the end user. With diversified operations around the globe, we think it's a rare find in the industry.

We like it so much, we’ve named it as 1 Top Stock for 2016 and Beyond. To find out why, simply enter your email address below to claim your FREE copy of this brand new report, "1 Top Stock for 2016 and Beyond"!

Fool contributor Andrew Walker has no position in any stocks mentioned.