Investing in fundamentally strong dividend stocks with an attractive yield can help you begin a passive income stream at a low cost. While several dividend stocks are trading on the TSX, just a handful are positioned to deliver outsized gains to shareholders over the long term. In this article, I have identified two such TSX dividend stocks you can buy right now.
Is the TSX dividend stock a good buy right now?
Freehold Royalties (TSX:FRU) continues to execute its strategic shift toward liquid-weighted assets across North America. The Canada-based entity is positioning itself as a premier royalty company with growing exposure to premium-priced U.S. light oil basins.
Its fourth-quarter (Q4) results highlight this transformation, as Freehold reported funds from operations of $61 million ($0.40 per share) and full-year production of nearly 15,000 BoE (barrels of oil equivalent) per day.
A key focus for Freehold has been increasing its liquids exposure, which has grown from 55% in 2020 to a projected 66% in 2025. This shift has revenue implications, as Chief Executive Officer (CEO) David Spiker emphasized that 100 barrels of oil daily generates approximately $3.4 million in annual revenue, compared to $50,000 for the same volume of natural gas.
Freehold has made significant inroads in the Midland Basin of the Permian, where it’s now positioned to capture royalties on one in every three wells drilled, up from one in 12 a year earlier. ExxonMobil has emerged as Freehold’s largest payer in the Midland and second-largest overall contributor, representing half of its Midland production.
With 2025 production guidance of 15,800-17,000 BoE per day (10% growth at midpoint), Freehold offers investors exposure to multi-decade drilling inventory across North America, a $1.08 per share annual dividend, and increasing exposure to tariff-free U.S. light oil production.
Freehold’s dividend yield remains attractive at 8.8%, while its payout ratio in Q4 was sustainable at 67.5%. Moreover, Freehold achieved an organic reserve replacement of 100% on a proved developed producing basis, extending its track record of delivering per-share reserves growth while maintaining financial discipline with a conservative balance sheet approach.
The bull case for this TSX REIT
Valued at a market cap of $3.2 billion, Dream Industrial REIT (TSX:DIR.UN) is a real estate investment trust. It owns and operates a growing portfolio of industrial properties in key markets across North America and Europe.
The REIT reported 4.6% comparative properties NOI (net operating income) growth for the full year, achieving its fourth consecutive year of FFO (funds from operations) per unit and free cash flow growth.
Under CEO Alexander Sannikov’s leadership, Dream Industrial has strategically transformed its portfolio, focusing on urban industrial assets that serve a broad range of users. The REIT ended 2024 with 95.8% in-place and committed occupancy, up 30 basis points from the previous quarter, maintaining a healthy 75% tenant retention ratio.
Despite 600,000 square feet of unplanned lease terminations, the REIT successfully signed over 7.3 million square feet of leases in 2024, with leasing momentum carrying into early 2025. Market rents remain 35% above in-place rents across the Canadian portfolio, providing significant embedded organic growth potential.
The REIT strengthened its balance sheet by reducing net debt-to-EBITDA from 7.7 times to 7.0 times in 2024 while maintaining leverage in its targeted mid-30% range.
Management expects net operating income to grow between 6% and 8% in 2025, while FFO per unit growth is forecast between 6% and 9%.
DIR continues to pursue value-add initiatives, including a solar program that generated $1.5 million in NOI in 2024 and exploring data center conversions, with power applications submitted for four sites totalling 200 megawatts.
The REIT remains well-positioned to benefit from what management describes as “reinforcement of supply chain resiliency,” driving consistent demand for industrial space.
