TFSA Investors: 2 Dividend-Growth Stocks to Buy Today

Canadians are searching for top dividend stock to add to their TFSA holdings.

Let’s take a look at Enbridge Inc. (TSX:ENB)(NYSE:ENB) and Sun Life Financial Inc. (TSX:SLF)(NYSE:SLF) to see why they might be interesting picks.


Enbridge is already a giant, but its recently announced acquisition of Spectra Energy will create the largest energy infrastructure firm in North America with an enterprise value of $165 billion.

The addition of Spectra brings substantial new natural gas assets and creates a diversified business with crude oil, liquids, and natural gas pipelines, as well as terminal and midstream operations, regulated utility businesses, and renewable power generation.

Investors have been concerned that demand for new infrastructure will drop as a result of the oil rout. That might be the case, but Enbridge and Spectra have combined commercially secured projects on the go worth $26 billion and another $48 billion in projects under development.

As the new assets are put into service, Enbridge expects to see cash flow rise enough to support a 15% dividend increase in 2017 and hikes of at least 10% per year through 2024.

Enbridge currently offers a yield of 3.6%.

Sun Life

Sun Life had a tough run during the Great Recession, but the company has bounced back and is once again focused on growth.

Management sold off the troublesome U.S. annuities business and has directed new investments in the country at fee-based businesses in the asset management space. The company set up a new division, Sun Life Investment Management, to hold the assets and has already purchased three companies that provide investment solutions for insurance firms, defined benefit plans, and other institutional bodies.

Sun Life is also ramping up its investments overseas with a specific focus on Asia’s growing middle class.

The company recently raised its ownership in its Indian partnership, Birla Sun Life, from 26% to 49%, and hiked its equity position in the Indonesian business to 100%. In Hong Kong, Sun Life just purchased a pension business.

The dividend increased twice last year and jumped again this spring. Investors should see the payout continue to rise as the new assets contribute more meaningfully to cash flow. The current payout yields 3.7%.

If you are looking for a financial stock, but are worried about housing risks for the Canadian banks, Sun Life is an attractive alternative.

Is one stock a better TFSA pick today?

Both Enbridge and Sun Life are solid TFSA choices.

Enbridge probably offers better dividend growth over the medium term, so I would make the pipeline operator my first pick.

Stock buy alert hits astounding 96% success rate!

The hand-picked investing team inside Stock Advisor Canada recently issued a buy alert for one special type of “bread-and-butter” stock where The Motley Fool U.S. has banked profits on 23 out of 24 recommendations. Frankly, with an astounding 96% success rate that has delivered average returns of 260%, chances are this new pick could deliver life-changing returns as well. Because the team at Stock Advisor Canada fully embraces the same time-tested investing philosophies that have led to countless Motley Fool winners globally. So simply click here to unlock the full details behind this new recommendation and join Stock Advisor Canada.

*96% accuracy includes restaurant stock recommendations from Motley Fool U.S. services Stock Advisor, Rule Breakers, Hidden Gems, Income Investor and Inside Value since each services inception. Returns as of 5/27/16.

Fool contributor Andrew Walker has no position in any stocks mentioned. The Motley Fool owns shares of Spectra Energy. Spectra Energy is a recommendation of Stock Advisor Canada.

I consent to receiving information from The Motley Fool via email, direct mail, and occasional special offer phone calls. I understand I can unsubscribe from these updates at any time. Please read the Privacy Statement and Terms of Service for more information.