Canadian pensioners are searching for top high-yield TSX dividend stocks to generate passive income inside a self-directed Tax-Free Savings Account (TFSA).
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Bank of Nova Scotia
Bank of Nova Scotia (TSX: BNS) trades near $67 per share at the time of writing. The stock is down 13% in 2025, giving investors who missed the big rally last fall another chance to buy the stock at a discounted price.
The bank is working through a strategy transition that will see Bank of Nova Scotia invest more capital in the United States and Canada and move away from Latin America, where the bank spent billions on acquisitions over the past 20-30 years.
Bank of Nova Scotia has already started its U.S. expansion through the US$2.8 billion purchase of a 14.9% stake in KeyCorp, an American regional bank. In Canada, Bank of Nova Scotia created a new executive position last year to oversee expansion in Quebec. The bank has also indicated that it sees growth opportunities in British Columbia.
Earlier this year, Bank of Nova Scotia sold its operations in Colombia, Panama, and Costa Rica, booking a large loss on the transaction. This might be one reason investors punished the stock in recent months.
It will take time for the turnaround efforts to deliver results, but the stock looks cheap at this level. In the meantime, investors can get a 6.3% dividend yield.
TC Energy
TC Energy (TSX: TRP) is up 38% in the past year and more gains could be on the way. The company has two major pipeline projects that will ramp up in 2025.
This is good news for investors who watched the budget for the Coastal GasLink pipeline more than double to about $14.5 billion. The pipeline will move natural gas from Canadian producers to a new liquified natural gas (LNG) export facility on the coast of British Columbia.
The Southeast Gateway natural gas pipeline in Mexico was completed under budget earlier this year and is expected to start generating revenue next month.
Natural gas demand is expected to rise in the coming years as gas-fired power generation facilities are built to provide electricity for artificial intelligence data centres being built around the globe. TC Energy’s extensive transmission and storage assets position it to benefit from the trend.
TC Energy did a good job of monetizing non-core assets in the past couple of years to shore up the balance sheet to push ahead on the rest of the capital program. The company plans to invest about $6 billion per year over the medium term. As the new assets are completed and go into service, the boost to revenue and cash flow should support steady dividend increases. TC Energy raised the dividend in each of the past 25 years. Investors who buy the stock at the current level can get a dividend yield of 5%.
The bottom line on top stocks for passive income
Bank of Nova Scotia and TC Energy pay attractive dividends that should continue to grow. If you have some cash to put to work in a TFSA focused on passive income, these stocks deserve to be on your radar.
