Retirees: 3 Top TSX Stocks for Tax-Free Passive Income

These top dividend stocks should be attractive picks for a TFSA portfolio focused on passive income.

Canadian pensioners are searching for top dividend stocks to put in their TFSA to generate reliable tax-free passive income.

Telus

Telus (TSX: T)(NYSE: TU) is a major player in the Canadian communications sector. The company provides world-class mobile, internet, and TV services to customers across its vast wireless and wireline networks.

Telus ramped up investment in upgrades in the past few years, including a program to switch legacy copper lines to fibre and the building of its 5G network. Management says the heavy lifting on the capital programs should be complete by the end of 2023. This means investors should see more free cash flow available for distribution increases over the medium term.

Telus has a great track record of dividend growth. The board raised the payout by 5.1% late last year. Investors who buy the stock at the current price of $32 per share can pick up a solid 4% dividend yield.

Telus has subsidiaries that could grow to be significant contributors to revenue and cash flow. Telus Health is a leader in providing Canadian doctors, hospitals, and insurance companies with digital healthcare solutions. Telus Agriculture is using its expertise to help farmers across the country improve the efficiency of their businesses.

Telus is also expanding its security offerings to existing residential and business clients. This provides additional revenue opportunities that can be bundled with existing services.

Telus is a good defensive stock to own in a TFSA if you are concerned about global geopolitical risks to the financial market. The company primarily operates in Canada and provides essential services.

Pembina Pipeline

Pembina Pipeline (TSX: PPL)(NYSE: PBA) is an energy infrastructure firm focused on the midstream segment of the oil and gas industry. The company is a full-service provider with gas gathering and processing assets, logistics operations, pipelines, and export terminals. The rebound in the oil and gas markets looks set to continue for some time. As energy companies ramp up output to meet the strong demand, Pembina Pipeline should benefit.

The company grows through strategic acquisitions, internal projects, and has more recently entered partnerships to evaluate opportunities for liquified natural gas (LNG) exports and carbon sequestration.

Pembina Pipeline trades near $47 per share at the time of writing. That’s about triple what savvy investors paid when the market crashed in 2020 but the stock still appears attractive when the growth opportunities are taken into consideration. Even with the big rally off the pandemic lows PPL stock still offers a juicy 5.35% yield today.

Emera

Emera (TSX: EMA) is a utility company based in Halifax with assets located in Canada, the United States, and the Caribbean. The utility operator provides electric and natural gas distribution services to homes and businesses. The majority of the revenue comes from regulated assets, meaning cash flow tends to be predictable and reliable. That’s important for retirees who need stable dividend payouts from their investments.

Emera is working on more than $7 billion in capital projects that should boost the rate base enough to support annual dividend increases of 4-5% in the next few years. This is another good defensive stock to own in a TFSA portfolio focused on passive income.

Emera trades near $60 per share at the time of writing and provides a 4.4% dividend yield.

The bottom line

Telus, Pembina Pipeline, and Emera are all top dividend stocks that offer attractive yields for investors seeking reliable passive income. If you have some cash to put to work in a TFSA, these stocks deserve to be on your radar.

The Motley Fool recommends EMERA INCORPORATED, PEMBINA PIPELINE CORPORATION, and TELUS CORPORATION. Fool contributor Andrew Walker owns shares of Emera, Pembina Pipeline, and Telus.

More on Investing

money goes up and down in balance
Investing

What’s Going on With goeasy’s Dividend?

As goeasy’s management is working to stabilize the business and improve its credit performance, its dividend could remain suspended.

Read more »

golden sunset in crude oil refinery with pipeline system
Dividend Stocks

Telus and BCE Are Struggling: The Stock I’d Buy Instead Yields 5.8%

This Canadian stock yields about 5.8% and has a solid dividend growth history backed by a resilient business model and…

Read more »

man shops at grocery store
Investing

I’m Betting on Dollarama’s Latin American Growth After 29 New Stores in One Quarter

Dollarama stock continues to benefit from positive momentum in its retail operations in all countries that it operates.

Read more »

A worker gives a business presentation.
Stocks for Beginners

September Inflation Lands October 19: What It Means for Your Mortgage Rate

September inflation could change mortgage offers before the Bank of Canada acts. Here’s how to prepare without predicting the report.

Read more »

senior man smiles next to a light-filled window
Dividend Stocks

The Perfect Retirement TFSA Stock: A 4.8% Yield With Monthly Paycheques

Here’s why this monthly dividend stock could be an ideal addition to your TFSA if you’re looking for retirement income…

Read more »

Printing canadian dollar bills on a print machine
Tech Stocks

I’d Keep Shopify for its 18% Free Cash Flow Margin

With an expanding 18% free cash flow margin and massive share buybacks, Shopify proves why it remains a top TSX…

Read more »

woman relaxes with phone
Dividend Stocks

Telus Cut Its Dividend: At a 7.4% Yield, Here’s the Case for Buying Now

TELUS cut its dividend by 55%, yet shares yield 7.4%. See what the dividend reset means for income investors and…

Read more »

dreaming of financial success
Dividend Stocks

Early-Retirement Dream? How Your Accounts Can Help You Get There

Use Canada’s registered accounts to save and invest to help realize your early-retirement dream!

Read more »