Canadian pensioners are wondering where they can get good dividend yields in the current market without taking on too much capital risk in their Tax-Free Savings Account (TFSA) investments.
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Fortis
Fortis (TSX:FTS) is a good stock to own during uncertain economic times. The company operates utility businesses in Canada, the United States, and the Caribbean that generate most of their revenue from rate-regulated assets. This means cash flow is normally predictable and reliable. Households and corporate customers need to keep the lights on and heat their buildings regardless of the state of the economy.
At the time of writing, Fortis trades near its 12-month high. The stock is up nearly 13% in 2025 and has delivered a gain of 26% over the past year.
Growth comes from acquisitions and organic projects. Fortis hasn’t made a large purchase for several years, but that could change if interest rates continue to decline and consolidation ramps up in the technology sector.
In the meantime, Fortis is working on a $26 billion capital program that will increase the rate base from $39 billion in 2024 to $53 billion in 2029. Management expects the revenue from the new assets to rise enough to support planned annual dividend increases of 4% to 6% per year over this timeframe. That’s great dividend-growth guidance in uncertain economic times. Fortis increased the dividend in each of the past 51 years. Investors who buy FTS stock at the current level can get a dividend yield of 3.65%.
Enbridge
Enbridge (TSX:ENB) spent the past few years diversifying its asset portfolio to position the business to take advantage of new trends in the energy sector. In 2024, Enbridge purchased three natural gas utilities in the United States for US$14 billion. The deal made Enbridge the largest natural gas utilities operator in North America at a time when natural gas demand is expected to grow. Hundreds of new gas-fired power facilities are being built to provide electricity for artificial intelligence data centres.
Previously, Enbridge secured a stake in the Woodfibre liquified natural gas (LNG) facility being built in British Columbia. It also bought an oil export terminal in Texas. International demand for Canadian and U.S. natural gas and oil is rising as countries seek reliable suppliers.
On the development side, Enbridge has its own $26 billion capital program that is expected to deliver 7% to 9% growth in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) through 2026. Distributable cash flow growth is targeted at 3%. This should support steady dividend hikes. Enbridge increased the dividend in each of the past 30 years. Investors who buy the stock at the current price can get a dividend yield near 6%. ENB is up 30% in the past 12 months.
The bottom line on top stocks for passive income
Fortis and Enbridge pay attractive dividends that should continue to grow in the coming years. If you have some cash to put to work in a self-directed TFSA focused on passive income, these stocks deserve to be on your radar.
