Retirees and other dividend investors are searching for good Canadian dividend stocks to buy for self-directed Tax-Free Savings Account (TFSA) portfolios focused on generating steady passive income.
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Fortis
Fortis (TSX:FTS) is a Canadian utility company with assets located across Canada, the United States, and the Caribbean. The company’s businesses include natural gas distribution utilities, power generation facilities, and electricity transmission networks.
Fortis is up 25% in the past year. The stock picked up a nice tailwind when the Bank of Canada and the U.S. Federal Reserve started cutting interest rates in the second half of 2024. Additional rate cuts appear to be on pause as the central banks wait to see how tariffs will impact the economy and inflation. Investors are still moving into Fortis, however, due to the reliability of its cash flow and the fact that its services shouldn’t be directly impacted by the trade disputes.
Fortis gets nearly all of its revenue from rate-regulated businesses providing essential products and services. Households need power and natural gas regardless of the state of the economy.
Fortis is working on a $26 billion capital program that will raise the rate base from $39 billion in 2024 to $53 billion in 2029. As the new assets are completed and go into service, the company expects cash flow to rise enough to support planned annual dividend increases of 4% to 6% over five years. Fortis raised the dividend in each of the past 51 years. At the time of writing, the stock provides a dividend yield of 3.65%.
Canadian Natural Resources
Canadian Natural Resources (TSX:CNQ) trades near $40 per share at the time of writing. The stock is down 23% in the past 12 months, largely due to weaker oil prices. The company’s US$6.5 billion purchase of Chevron’s Canadian assets last year might also be putting pressure on the stock as oil prices have dropped since the deal was completed.
West Texas Intermediate (WTI) oil trades near US$62.50 per barrel right now compared to more than US$80 a year ago. Analysts widely expect the oil market to remain oversupplied through the rest of 2025 and into next year. Weak demand in China and higher production from non-OPEC countries is expected to continue. A global trade war could push the United States and other countries into a recession. If an economic downturn lingers, oil prices could retest the recent dip below US$60.
On the positive side, CNRL says its WTI breakeven price is US$40 to US$45 per barrel, so the company is still generating good margins in the current market conditions. CNRL raised the dividend twice in 2024 and already hiked it once in 2025. The board has increased the dividend for 25 consecutive years.
Investors who buy CNQ stock at the current level can get a dividend yield of 5.8%.
The bottom line on top TSX stocks for passive income
Fortis and CNRL pay attractive dividends that should continue to grow for years. If you have some cash to put to work in a self-directed TFSA, these stocks deserve to be on your radar.
