TFSA Investors: 3 Dividend Stocks Worth Holding Forever

These TSX stocks have the potential to grow their dividends over the next decade, making them top investments for TFSA investors.

| More on:
The TFSA is a powerful savings vehicle for Canadians who are saving for retirement.

Source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Investing in top Canadian dividend stocks can be a solid way to generate passive income. A Tax-Free Savings Account (TFSA) makes this strategy even better by letting you grow dividends, interest, and capital gains tax-free, which can significantly boost long-term returns. With this background, here are three fundamentally strong dividend stocks worth holding forever in a TFSA for a stress- and tax-free income.

Dividend stock #1

Fortis (TSX:FTS) is a leading North American regulated electric and gas utility company famous for offering worry-free dividends. With regulated utilities accounting for 99% of Fortis’ assets, the company generates growing and predictable earnings and cash flows in all market conditions, supporting its payouts.

Created with Highcharts 11.4.3Fortis PriceZoom1M3M6MYTD1Y5Y10YALL6 Apr 20203 Apr 2025Zoom ▾Jul '20Jan '21Jul '21Jan '22Jul '22Jan '23Jul '23Jan '24Jul '24Jan '25202120212022202220232023202420242025202540506070www.fool.ca

Primarily focused on energy delivery, 93% of Fortis’s assets are in transmission and distribution, which bring low-risk, stable returns. Thanks to its resilient business model and growing cash flows, Fortis has raised its dividend for 51 years straight. The company plans to keep up this trend by investing in its regulated asset base, which supports future earnings growth.

Fortis expects its rate base to grow at a compound annual growth rate (CAGR) of 6.5% through 2029, enabling it to increase its dividend by 4–6% annually during the same period.

In summary, Fortis’s low-risk earnings base, resilient business model, growing regulated asset base, and visibility on future dividend growth make it a reliable income stock. Further, Fortis offers a well-protected yield of 4.1%.

Dividend stock #2

TFSA investors could add Enbridge (TSX:ENB) stock for its reliable dividend payments and attractive yield. Enbridge is an energy infrastructure company with an extensive liquids pipeline network connecting major demand and supply zones. This robust infrastructure, backed by long-term contracts, helps Enbridge generate stable earnings and distributable cash flow (DCF) through various economic and commodity cycles.

Created with Highcharts 11.4.3Enbridge PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

Enbridge’s growing DCF has enabled it to pay dividends for over 69 years. Moreover, the energy company has increased its dividend for 29 consecutive years at a CAGR of 10%. Besides growing dividends, Enbridge stock offers a high yield of 6.5%.

Enbridge is well-positioned to continue growing its dividend thanks to its extensive pipeline network, high asset utilization, long-term contracts, power-purchase agreements, and regulated tolling frameworks. Further, its multi-billion capital projects and strategic acquisitions are set to accelerate growth and enhance its asset base.

Enbridge’s management is optimistic and aims to reward its shareholders with higher dividends. The company’s EPS (earnings per share) and DCF will likely grow at a mid-single-digit rate over the long term. This will help Enbridge to consistently increase its dividends.

Dividend stock #3

Shares of Canadian communication giant BCE (TSX:BCE) are a compelling investment for TFSA investors.  The company’s stellar dividend payments history, ability to grow earnings in all market conditions, focus on returning higher cash to shareholders, and high yield makes BCE a top passive income stock.

BCE has raised its dividend for 16 consecutive years and is on track to increase it further in the coming years. It offers an attractive yield of 8.9%.

Created with Highcharts 11.4.3Bce PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

BCE’s extensive broadband fibre network and fast 5G services give it an edge in the highly competitive telecom sector. The company’s cost-efficient promotions and targeted expansions have contributed to its consistent earnings growth, enabling it to maintain and increase its dividend.

In addition to its core telecom services, BCE is expanding into high-growth segments such as digital advertising, cloud computing, and cybersecurity. These areas offer additional revenue streams and enhance BCE’s resilience to market fluctuations. Meanwhile, ongoing cost-cutting measures further support the company’s commitment to shareholder returns, positioning BCE to sustain dividend growth for years to come.

Should you invest $1,000 in Telus right now?

Before you buy stock in Telus, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Telus wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $20,697.16!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 29 percentage points since 2013*.

See the Top Stocks * Returns as of 3/20/25

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 Sneha Nahata has no position in any of the stocks mentioned. The Motley Fool recommends Enbridge and Fortis. The Motley Fool has a disclosure policy.

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Dividend Stocks

a person watches a downward arrow crash through the floor
Dividend Stocks

Is This Correction Your Chance? Top 4 Canadian Dividend Stocks on Sale

Stocks may be down, but now is your chance to get some of these top dividend stocks on sale.

Read more »

Confused person shrugging
Dividend Stocks

Where to Invest $2,500 in the TSX Today

These TSX stocks offer attractive dividends and a shot at decent upside on a rebound.

Read more »

Pile of Canadian dollar bills in various denominations
Dividend Stocks

Invest $25,000 in These Dividend Stocks for $1,956.66 in Annual Passive Income

Dividends stocks can make a huge difference, even if shares don't move an inch. And these might be the best.

Read more »

Pile of Canadian dollar bills in various denominations
Dividend Stocks

Got $5,000? 5 Income Stocks to Buy and Hold Forever

These income stocks have a solid dividend-payout history that can help you earn stress-free passive income.

Read more »

grow money, wealth build
Dividend Stocks

Why I’d Invest $10,000 in This Undervalued Dividend-Growth Stock for Decades of Income

This undervalued dividend stock offers a high yield of over 8% and can help you earn more than $200 in…

Read more »

TFSA (Tax-Free Savings Account) on wooden blocks and Canadian one hundred dollar bills.
Dividend Stocks

Here’s Exactly How a $20,000 TFSA Could Potentially Grow to $200,000

Index funds like the iShares S&P/TSX Capped Composite Index (TSX:XIC) are tax free in a TFSA.

Read more »

Dividend Stocks

How I’d Invest $6,000 in Canadian Real Estate Stocks to Build Lasting Wealth

Canadian REITs on sale! See how grocery-anchored retail properties offering 9% yields could turn $6,000 into lasting wealth despite US…

Read more »

rain rolls off a protective umbrella in a rainstorm
Dividend Stocks

Economic Headwinds: Should You Still Consider Buying the Dip?

A market dip might seem like a bumpy road, but it can be far smoother in the future with the…

Read more »