TFSA: 2 Dividend Stocks to Buy for Growing Passive Income

These top TSX dividend stocks deserve to be on your radar for passive income.

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A number of top TSX dividend stocks trade at discounted prices and now offer attractive yields for a self-directed Tax-Free Savings Account (TFSA) focused on passive income and total returns.


Fortis (TSX:FTS) raised the dividend in each of the past 50 years and intends to boost the payout by at least 4% annually through 2028. This track record and solid dividend-growth guidance are the reason to look past the current 4.4% yield and buy the stock.

Fortis trades near $53.50 at the time of writing. Bargain hunters who swooped in at $50 last fall are already sitting on nice gains, but more upside should be on the way as the Bank of Canada extends rate cuts through 2025.

Falling borrowing costs will support profits and should free up more cash for distributions. Fortis expects its $25 billion capital program to drive the rate base up from $37 billion in 2023 to $49 billion in 2028. The resulting boost to cash flow should support the planned dividend increases.


Enbridge (TSX:ENB) has increase its dividend for 29 consecutive years. At the current share price, investors can get a dividend yield of 7.6%.

Enbridge also has $25 billion in capital projects on the go and is wrapping up its US$14 billion purchase of three natural gas utilities in the United States this year. Management expects contributions from new assets to deliver 3% annual growth in distributable cash flow (DCF) through 2026 and 5% DCF growth afterwards.

Anticipated interest rate cuts in both Canada and the United States next year will reduce borrowing costs and should entice investors back to the stock. Enbridge trades near $48 per share at the time of writing compared to $59 two years ago, so there is decent upside potential on an extended rebound.

The bottom line on top stocks for passive income

Fortis and Enbridge are good examples of top TSX dividend stocks with great track records of distribution growth. If you have some cash to put to work in a TFSA portfolio focused on passive income, these stocks still look cheap and deserve to be on your radar.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

The Motley Fool recommends Enbridge and Fortis. The Motley Fool has a disclosure policy. Fool contributor Andrew Walker owns shares of Enbridge.

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