TFSA Income Stream: 2 Top Dividend Stocks to Own for Decades

Here’s why TSX dividend stocks such as Brookfield Infrastructure and EQB should be on top of your TFSA shopping list right now.

| More on:
Person holds banknotes of Canadian dollars

Source: Getty Images

The tax-sheltered status of the TFSA (Tax-Free Savings Account) makes it an ideal vehicle to hold and own dividend-growth stocks. Generally, companies that grow their dividends each year enjoy a widening base of cash flow and earnings, resulting in long-term capital gains. So, the best dividend stocks can help you earn a steady stream of recurring income that can be reinvested, as well as benefit from share price appreciation over time.

Here are two such top dividend stocks you can buy right now and hold over several decades.

Brookfield Infrastructure Partners stock

Valued at a market cap of $21 billion, Brookfield Infrastructure Partners (TSX:BIP.UN) pays shareholders a forward dividend yield of 4.8%. Since its initial public offering in 2008, Brookfield Infrastructure Partners stock has returned 609% to shareholders. However, if we adjusted for dividend reinvestments, cumulative returns would be closer to 1,430%. Despite its outsized gains, Brookfield Infrastructure stock trades 20% below all-time highs, allowing you to buy a quality stock at a discount.

The Canadian company owns and operates a portfolio of cash-generating assets across verticals such as utilities, transport, midstream, and data centers globally. Its utilities business operates electricity transmission and distribution lines and natural gas pipelines. The transport business offers transportation, storage, and handling services for merchandise goods, commodities, and passengers. The midstream business offers natural gas transmission, gathering, processing, and storage services, while the data center segment operates telecom towers, fibre optic cables, data centres, and distributed antenna systems.

Despite a challenging macro environment, Brookfield Infrastructure reported adjusted funds from operations (FFO) of US$608 million, an increase of 10% year over year. Moreover, the infrastructure giant ended the second quarter (Q2) with a backlog of US$7.7 billion, up 15% year over year.

Brookfield continues to sell legacy assets and reinvest the proceeds to reduce debt or acquire higher-growth assets. In the June quarter, it liquidated assets worth US$210 million, bringing its total capital-recycling proceeds to US$1.4 billion in 2024.

In the last 15 years, Brookfield Infrastructure has grown its dividends at a compound annual growth rate of 9%, significantly enhancing the yield at cost.

EQB stock

Valued at $3.93 billion by market cap, EQB Bank (TSX:EQB) pays shareholders an annual dividend of $1.88 per share, indicating a forward yield of 1.8%. While its dividend yield is not too attractive, the TSX bank stock has returned over 270% to shareholders in dividend-adjusted gains in the past decade. Moreover, in the last 20 years, its quarterly dividends have risen from $0.03 per share to $0.47 per share.

EQB Bank reported record revenue and earnings in fiscal Q3 (ended July) due to higher net interest income, loans under management, and non-interest revenue, which now accounts for 17% of total revenue. EQB explained that non-interest income includes contributions from its alternative asset management platform.

Despite EQB’s stellar returns, the stock trades at a cheap valuation, given that adjusted earnings are forecast to expand from $9.4 per share in fiscal 2023 to $12.4 per share in fiscal 2025. Priced at 9.5 times forward earnings, the top TSX stock is forecast to expand earnings by 19.5% annually in the next five years, making it a top investment option right now.

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.

Fool contributor Aditya Raghunath has no position in any of the stocks mentioned. The Motley Fool recommends Brookfield Infrastructure Partners and EQB. The Motley Fool has a disclosure policy.

More on Dividend Stocks

Canadian dollars are printed
Dividend Stocks

Transform Your TFSA Into a Cash-Creating Machine With $15,000

If you have a windfall of $15,000, putting it in a TFSA is a great start. But investing it in…

Read more »

woman retiree on computer
Dividend Stocks

1 Reliable Dividend Stock for the Ultimate Retirement Income Stream

This TSX stock has given investors a dividend increase every year for decades.

Read more »

calculate and analyze stock
Dividend Stocks

8.7% Dividend Yield: Is KP Tissue Stock a Good Buy?

This top TSX stock is certainly one to consider for that dividend yield, but is that dividend safe given the…

Read more »

grow money, wealth build
Dividend Stocks

TELUS Stock Has a Nice Yield, But This Dividend Stock Looks Safer

TELUS stock certainly has a shiny dividend, but the dividend stock simply doesn't look as stable as this other high-yielding…

Read more »

profit rises over time
Dividend Stocks

A Dividend Giant I’d Buy Over TD Stock Right Now

TD stock has long been one of the top dividend stocks for investors to consider, but that's simply no longer…

Read more »

analyze data
Dividend Stocks

Top Financial Sector Stocks for Canadian Investors in 2025

From undervalued to powerfully bullish, quite a few financial stocks might be promising prospects for the coming year.

Read more »

Canada national flag waving in wind on clear day
Dividend Stocks

3 TFSA Red Flags Every Canadian Investor Should Know

Day trading in a TFSA is a red flag. Hold index funds like the Vanguard S&P 500 Index Fund (TSX:VFV)…

Read more »

Paper Canadian currency of various denominations
Dividend Stocks

1 Magnificent Canadian Stock Down 15% to Buy and Hold Forever

Magna stock has had a rough few years, but with shares down 15% in the last year (though it's recently…

Read more »