Top TSX dividend stocks with high yields can generate steady passive income and stabilize your investment portfolio. By selecting TSX stocks with a strong track record of consistent dividend payments, solid financial health, and visibility on future payouts, you can build a portfolio that generates dependable income in all market conditions.
Additionally, leveraging a Tax-Free Savings Account (TFSA) can optimize your passive-income strategy. For instance, holding dividend-paying stocks within a TFSA allows you to keep your earnings tax-free, thus enhancing your returns.
Against this background, here is a top Canadian dividend stock that could generate over $414/year in passive income with an investment of $7,000, the TFSA contribution limit for 2025.
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A top Canadian dividend stock with 5.9% yield
While the TSX has several high-quality dividend-paying stocks like Fortis and Canadian Utilities that have grown their dividends for over 50 years, investors could consider adding Enbridge (TSX:ENB) to their portfolios for its solid dividend payments history and high and dependable yield.
Enbridge is an integrated energy infrastructure company. Its highly diversified portfolio, including liquid pipelines, gas transmission and midstream operations, gas distributions and storage, and renewable power, positions it well to deliver resilient earnings and distributable cash flows (DCF).
Its conventional and green energy projects position it well to capitalize on growing energy demand. Further, its highly contracted cash flows and negligible exposure to commodity price fluctuations enable Enbridge to pay and increase the dividend regardless of commodity and economic cycles. Thanks to its resilient and growing earnings DCF, Enbridge has increased its dividend for 30 consecutive years. Further, this Dividend Aristocrat has consistently paid dividends for 70 years.
Enbridge stock currently offers a quarterly dividend of $0.943 per share, translating into a high annualized yield of over 5.9%.
Enbridge sees mid-single-digit dividend growth
Enbridge’s management sees its earnings and DCF per share growing at a mid-single-digit rate in the long term. Further, its annual dividend is projected to increase in line with its DCF per share. This implies that its dividend will likely increase by a mid-single-digit rate in the long run.
Notably, Enbridge’s higher dividend payments will be driven by its diversified portfolio, long-term contracts, and low-risk commercial arrangements. The company’s liquids pipelines connect major supply basins with demand markets, ensuring high system utilization. Management sees all systems to be highly utilized for decades, supporting its DCF growth. Further, its focus on optimizing its operations and low-cost expansion opportunities will likely drive the cash flows of its liquids pipelines business, which accounts for roughly half of its overall portfolio.
While the momentum in its liquids pipelines business will likely be sustained, natural gas demand and minimal commodity risk will drive its gas transmission and midstream operations and enable it to generate low-risk cash flows. Enbridge’s utility operations add stability, generating predictable earnings. Further, the recent acquisition of three U.S. gas utilities augurs well for future growth. Enbridge is poised to benefit from the growing demand for clean energy in the renewable power business. All of these factors will likely support the company’s higher payouts.
Earn over $414 in passive income
Enbridge’s growing earnings and DCF, visibility over future payouts, and high yield make it a top stock for generating passive income. The table below shows that a $7,000 investment in Enbridge stock through a TFSA can generate a quarterly tax-free dividend income of $103.73, equating to $414.92 per year.
| Company | Recent Price | Number of Shares | Dividend | Total Payout | Frequency |
| Enbridge | $63.51 | 110 | $0.943 | $103.73 | Quarterly |
