Having a Tax-Free Savings Account (TFSA) without high-quality dividend stocks is like leaving money on the table. The TFSA’s tax-free structure makes it an amazing tool for holding dividend-paying stocks that could allow you to generate steady, tax-free income for years to come while letting you enjoy potential capital appreciation over time. By selecting the right stocks with a history of strong dividend payouts and consistent growth, any TFSA holder can build a portfolio to grow wealth over the long term.
In this article, I’ll introduce two top Canadian dividend stocks that are must-haves for your TFSA, which you can buy, hold, and watch your savings grow as long as you want.
Enbridge stock
Enbridge (TSX:ENB) could arguably be considered one of the best dividend stocks for Canadian TFSA investors. This Calgary-headquartered Dividend Aristocrat recently announced the 30th consecutive annual increase in its dividend per share.
After surging by nearly 25% in 2024, ENB stock currently trades at $59.43 per share with a market cap of $129.2 billion. Despite this jump in share prices, the stock still offers an attractive 6.3% annualized dividend yield and distributes these payouts every quarter.
Enbridge’s decades-long track record of combining stability with growth makes it a very reliable dividend-yielding stock for TFSA investors. In the third quarter of 2024, the energy infrastructure giant posted a net profit of $1.3 billion against $532 million profit in the same quarter the previous year. This growth was mainly driven by strong utilization across its core assets, higher toll revenues on its Mainline pipeline system, and contributions from newly acquired assets.
In recent years, Enbridge has also increased its focus on advancing its renewable energy projects and expanding its presence in crude oil export segments. These initiatives could not only benefit the company in the long run but also align with global trends toward cleaner energy and sustainable infrastructure. That’s why ENB continues to be my top recommendation for TFSA investors seeking an income-generating stock to hold forever.
Manulife Financial stock
While Manulife Financial (TSX:MFC) doesn’t have a three-decade-long dividend-growth streak that of Enbridge, it still stands out as an excellent dividend stock for TFSA investors. This Toronto-based insurance and financial services giant offers a strong combination of stable payouts and solid long-term growth potential.
With its 50% gains, MFC stock outperformed the broader market by a wide margin in 2024, currently trading at $44.06 per share with a market cap of $75.8 billion. At this market price, it has a 3.7% annualized dividend yield.
One of the main factors that makes Manulife stock a stable choice for TFSA investors is its ability to maintain strong earnings growth despite macroeconomic challenges. In the September 2024 quarter, the company reported an 8.7% year-over-year increase in its adjusted earnings to $1 per share with the help of strong performances across its core business segments. This resilience, coupled with its focus on profitable expansion in high-growth markets, makes Manulife a dependable stock pick for TFSA investors.
