The Canadian stock market had a stellar year in 2024, but 2025 presents a different set of challenges. With interest rate adjustments underway and geopolitical risks looming, it might be a good idea for cautious investors to seek safer ways to grow their Tax-Free Savings Accounts (TFSAs). By choosing safe TSX stocks that offer consistent earnings growth and solid fundamentals, you could grow your wealth while minimizing exposure to unnecessary risks.
In this article, I’ll talk about two top TSX stocks that are ideal for cautious TFSA investors, which are also parts of my stock portfolio.
CNQ stock
While Canadian Natural Resources (TSX:CNQ) might not make you rich overnight, it’s arguably one of the most dependable TSX stocks for cautious TFSA investors seeking stability and income, in my opinion. As one of the largest energy producers in Canada, it has a well-diversified portfolio that includes oil sands, natural gas, and conventional crude oil assets.
Over the last five years, CNQ stock has jumped by nearly 130% to currently trade at $47.01 per share with a market cap of $99.3 billion. The company distributes its dividend payouts every quarter and offers a 4.8% annualized dividend yield right now.
The strength of CNQ’s business model could be understood by the fact that its diversified portfolio allows it to adapt to changing market dynamics and focus capital on high-return projects. In the third quarter of 2024, the Canadian energy giant’s production averaged an impressive 1,363,000 barrels of oil equivalent per day, helping it post an adjusted quarterly profit of $2.1 billion, exceeding Street analysts’ expectations.
Despite facing challenges due to fluctuating commodity prices, CNQ’s operations and financials are continuing to show resilience. Its ability to generate consistent free cash flow has not only supported dividend growth for 25 consecutive years but also funded strategic acquisitions that strengthen its asset base further. Overall, CNQ’s combination of reliable income, strong fundamentals, and focus on growth opportunities makes it a top stock to hold in any TFSA.
Dollarama stock
Just like CNQ, Dollarama (TSX:DOL) is also a safe TSX dividend stock that TFSA investors may consider holding for years to come. After yielding 125% returns over the last three years, DOL stock currently trades at $139.26 per share with a market cap of $39.2 billion.
Although its annualized dividend yield is currently less than 1%, which may not immediately catch the eye of income-focused investors, DOL stock makes up for it with its consistent growth and recession-resistant business model. As Canada’s top value retailer, the demand for Dollarama’s affordable products remains strong, even during periods of economic uncertainty.
Even as a weak consumer spending environment has hurt retailers across Canada in recent quarters, Dollarama’s revenue rose 8.2% year over year in the trailing 12 months, while its adjusted earnings jumped by more than 18%. Moreover, the company’s focused approach to expanding its store network and optimizing operations brightens its long-term growth outlook, making it a top TSX stock pick for cautious TFSA investors.
