The Tax-Free Savings Account (TFSA) limit is $7,000 for 2025. Canadian dividend investors are wondering which TSX stocks are attractive right now for a self-directed TFSA portfolio focused on income and total returns.
Source: Getty Images
Fortis
Fortis (TSX:FTS) raised its dividend in each of the past 51 years. That’s the kind of dividend-growth reliability investors want to see when choosing stocks for a buy-and-hold portfolio.
Fortis is working on a $26 billion capital program that will raise the rate base from roughly $39 billion in 2024 to $53 billion in 2029. As the new assets are completed and go into service, the resulting boost to cash flow should support planned annual dividend increases of 4% to 6%.
Investors who buy FTS stock at the current price can get a dividend yield of 4.1%.
Bank of Nova Scotia
Bank of Nova Scotia (TSX:BNS) is up about 18% in the past year to the current price of $77.50, but this is still way off the $93 it reached in early 2022 before going into a decline through much of that year and 2023.
Management is working through a strategy shift that will see Bank of Nova Scotia focus growth investments on Canada and the United States. Last year, Bank of Nova Scotia spent US$2.8 billion to secure a 14.9% position in KeyCorp, a regional bank in the U.S. market. The company also created a new executive position to drive growth in Quebec.
Previously, the bank focused on acquisitions in Latin America but is now beginning to exit some markets. In recent days, Bank of Nova Scotia announced a deal to sell its operations in Colombia, Panama, and Costa Rica. It still has a large presence in Mexico, Peru, and Chile. The Mexican business will likely remain part of the strategic mix, but monetization of the other assets could occur in the coming years.
It will take some time for investors to see benefits from the strategic shift, but you get paid a solid 5.6% dividend yield to wait for the turnaround.
TC Energy
TC Energy (TSX:TRP) completed the spinoff of its oil pipeline business last year. The company also monetized other non-core assets to reduce debt and shore up the balance sheet after costs ballooned on the Coastal GasLink pipeline project.
Looking ahead, Coastal GasLink is expected to go into commercial service in 2025 to bring natural gas from producers to a new liquified natural gas (LNG) facility being built on the coast of British Columbia. In addition, TC Energy is completing a major project in Mexico this year. The added revenue from these projects, along with new assets being built in the coming years, should support steady dividend growth.
At the time of writing, investors can get a dividend yield of 4.8% from TRP.
Telus
Telus (TSX:T) is a contrarian pick right now. The stock is down 17% in the past year and will continue to face headwinds in the coming months. Price wars, high interest rates, and regulatory uncertainty have made for a challenging environment, but Telus still managed to deliver solid results in 2024 and increased the dividend for 2025.
Volatility should be expected, but investors can get a dividend yield of 8% right now on Telus stock.
The bottom line on TFSA investments
Fortis, Bank of Nova Scotia, TC Energy, and Telus all pay attractive dividends. If you have some cash to put to work, these stocks deserve to be on your TFSA radar.
