If you’re looking to build the ultimate Canadian dividend portfolio in 2025, you may want to focus on some safe large-cap stocks that offer a combination of steady income with the potential for long-term growth. Your Tax-Free Savings Account (TFSA) could play an important role in this strategy, as it allows your dividends and capital gains to grow tax-free in the long run. By investing in high-quality Canadian dividend stocks, you could transform your TFSA into a reliable income-generating powerhouse with the potential to grow your wealth over time.
However, selecting stocks for such a portfolio requires careful consideration of factors like dividend consistency, financial stability, and growth potential. To help you with this process, let me quickly highlight two top Canadian dividend stocks that could form the foundation of a reliable and tax-efficient TFSA portfolio.
Enbridge stock
Enbridge (TSX:ENB) is the first large-cap dividend stock that deserves a spot in your TFSA dividend portfolio. This Calgary-based energy infrastructure giant has been known for raising dividends each year for three decades. Enbridge currently offers a compelling annualized dividend yield of 5.9%, as its stock trades at $63.93 per share with a market cap of $137.6 billion after rallying by 32.3% over the last year.
In the third quarter of 2024, Enbridge’s revenue jumped by 51.2% YoY (year over year) to $14.9 billion with the help of its diversified business operations and strategic acquisitions. The company also posted an 8% YoY increase in its adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) for the quarter to $4.2 billion. This EBITDA growth was mainly driven by higher tolls on its Mainline system, increased utilization of its Gulf Coast natural gas storage assets, and contributions from its recent acquisitions, including U.S.-based natural gas utilities.
Enbridge’s secured project backlog of $7 billion clearly reflects its efforts to accelerate growth, with projects spanning renewable energy, natural gas transmission, and storage. Moreover, its excellent track record of raising dividends solidifies ENB’s status as a top choice for income-focused TFSA investors.
Power Corporation stock
Power Corporation of Canada (TSX:POW) could be another reliable dividend stock that mainly stands out for its diversified financial services portfolio. This Montreal-based holding firm looks after core investments in several sectors, including insurance, retirement, and wealth management, making it a strong choice for long-term TFSA investors. Currently trading at $43 per share, the stock offers a reliable annualized dividend yield of 5.2%.
Despite the challenging market environment, Power Corporation is continuing to post strong operational results. In the quarter ended in September 2024, the company delivered an adjusted net profit of $542 million as Great-West Lifeco and IGM Financial continue to consistently contribute to its performance.
Another key factor that makes POW an amazing dividend stock for long-term investors is its focus on returning value to shareholders. In the first three quarters of 2024, Power Corporation executed a $309 million share buyback program, which reduced its outstanding shares by eight million. Also, its adjusted net asset value rose by 8.2% to $57.92 per share by the end of the September quarter.
Although temporary macroeconomic challenges may keep POW stock volatile in the near term, its diversified portfolio, solid financial performance, and focus on strategic initiatives, make it a great long-term income stock to buy now.
