3 Canadian Dividend Stocks to Consider Adding to Your TFSA in 2025

If you’re looking for long-term, undervalued dividend stocks to pick up in your TFSA, consider these first.

| More on:
A worker drinks out of a mug in an office.

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

When considering the best dividend stocks to include in a Tax-Free Savings Account (TFSA) for 2025, it’s essential to focus on companies that offer a strong balance of income, stability, and growth potential. That’s why today we’re looking at dividend stocks that offer just that. Each fits the bill in unique ways, making them excellent choices for Canadian investors. Whether you’re seeking high yields, exposure to transformative industries, or the benefits of diversification, these three stocks offer something for every TFSA strategy.

KP Tissue

KP Tissue (TSX:KPT), known for its 12.6% stake in Kruger Products, is a key player in Canada’s tissue products industry. It’s behind household brands like Cashmere, Purex, and SpongeTowels, which dominate the market with a reputation for quality and reliability. This steady consumer demand positions KP Tissue as a resilient income-generating stock.

In its most recent financial report for the third quarter (Q3) of 2024, KP Tissue posted revenues of $521.1 million, marking a year-over-year increase of 10.1%. However, the rising costs of pulp and transportation have weighed on the company’s adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), which saw a modest decline. Despite these challenges, KP Tissue remains committed to its dividend, currently yielding an impressive 8.67%. At $0.18 per quarter, this dividend has been a consistent feature, even in the face of economic headwinds.

Looking to the future, KP Tissue has outlined plans for expansion, including the construction of new facilities aimed at enhancing production capacity. Its payout ratio currently exceeds 100%, suggesting potential risks to sustainability. Yet the dividend stock’s leadership remains focused on stabilizing cash flows through strategic pricing and efficiency improvements.

Yellow Pages

Yellow Pages (TSX:Y) is no longer just about thick paper directories. It has successfully transformed itself into a digital media and marketing powerhouse catering to small- and medium-sized businesses across Canada. This shift from print to digital has allowed Yellow Pages to remain relevant in an increasingly online-focused world. Leveraging its established client relationships and brand recognition.

In its latest Q3 2024 earnings report, Yellow Pages reported revenues of $70.8 million, with digital revenues comprising a significant and growing portion of its total income. Net income came in at $12.3 million, underlining the dividend stock’s profitability and stable cash flow. With a quarterly dividend of $0.15 per share, Yellow Pages offers an annualized yield of approximately 4.5%. Backed by a disciplined approach to capital allocation. The dividend stock’s low payout ratio ensures that dividends are well-supported. Leaving room for growth or additional shareholder returns.

Future growth prospects for Yellow Pages are tied to its ability to expand its digital marketing services. With small businesses increasingly seeking online advertising and management tools, Yellow Pages is well-positioned to capitalize on this trend. Its focus on maintaining profitability and offering reliable dividends makes it a strong candidate for TFSA investors.

Power

Power Corporation of Canada (TSX:POW) is a diversified holding company with interests spanning financial services, asset management, and renewable energy. Through its subsidiaries, the dividend stock offers a blend of traditional and modern financial products — ones that appeal to a wide range of customers.

As of its latest quarterly results, Power Corporation boasts a market capitalization of $27.73 billion and a forward price-to-earnings (P/E) ratio of 8.54, reflecting its undervalued status compared to peers. Revenue for the trailing 12 months stood at $34.92 billion, supported by a profit margin of 6.49%. The dividend stock pays an annualized dividend of $2.25 per share, yielding approximately 5.25%. With a payout ratio of just under 64%, the dividend appears well-supported by earnings, making it a reliable income source for TFSA investors.

Looking ahead, Power Corporation’s focus on renewable energy and fintech innovation provides a growth runway while its core financial services ensure consistent cash flow. Its balanced approach to growth and stability makes it an ideal candidate for long-term investors seeking both income and diversification.

Should you invest $1,000 in Atco Ltd. right now?

Before you buy stock in Atco Ltd., 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 Atco Ltd. 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 Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends Yellow Pages. 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

woman analyze data
Dividend Stocks

Secure Dividends: How to Turn $10,000 Into Reliable Passive Income

Earn a secure dividend income of over $150 every quarter by investing in these reliable Canadian dividend stocks.

Read more »

top TSX stocks to buy
Dividend Stocks

Buy the Dip: This Top TSX Dividend Stock Just Became a Must-Own

This retail dividend stock is a Canadian legend, allowing investors to get in on some serious action with a strong…

Read more »

Blocks conceptualizing Canada's Tax Free Savings Account
Dividend Stocks

How to Build a $1 Million TFSA Starting With Just $10,000

Two established, high-yield dividend stocks can help turn a small seed capital into a million-dollar TFSA.

Read more »

money cash dividends
Dividend Stocks

Here’s How Many Shares of FIE You Should Own to Get $500 in Monthly Dividends

This monthly-paying dividend ETF is simple to understand.

Read more »

sale discount best price
Dividend Stocks

Is This Correction Your Chance? Top 5 Canadian Dividend Stocks on Sale

For value, income, and long-term growth, check out these top five dividend stocks.

Read more »

Stethoscope with dollar shaped cord
Dividend Stocks

Canadian Investors: Buy WELL Health Stock Right Now

WELL Health (TSX:WELL) stock might be on the downturn right now, but a bargain for value-seeking investors for their self-directed…

Read more »

A worker gives a business presentation.
Dividend Stocks

3 No-Brainer Canadian Stocks to Buy Under $70

Investing in stocks need not require you to burn a hole in your pocket. You can invest $70 to $100…

Read more »

View of high rise corporate buildings in the financial district of Toronto, Canada
Dividend Stocks

Canadian Real Estate Stocks Plummet: Is it Time to Sell or Buy?

Real estate stocks have a lot going for the, especially dividends. But are they all a buy or due to…

Read more »