Turning your Tax-Free Savings Account (TFSA) into a dependable income stream doesn’t have to involve complicated strategies or risky bets. Sometimes, a straightforward dividend stock with a stable business can do the heavy lifting. Westshore Terminals Investment (TSX: WTE) is one of those under-the-radar stocks that might not make headlines, but it quietly generates consistent cash flow and shares it generously with investors. With a $12,000 investment, this stock has the potential to turn your TFSA into a tax-free, cash-creating machine.
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The stock
Westshore Terminals operates Canada’s largest coal export terminal, located at Roberts Bank in Delta, B.C. It’s been in business for over 50 years, and while coal might sound outdated in a world chasing renewables, Westshore isn’t digging up the coal; it’s just moving it. The company’s role is to provide terminal services, loading coal onto ships for export to international markets, mostly in Asia. Its clients include some of the biggest coal producers in Western Canada and the United States.
What makes Westshore unique is that its business is structured to produce stable, fee-based revenue. It earns income on volumes handled, not on the price of coal itself. That distinction is important; it means the company isn’t directly exposed to commodity swings the way a mining stock would be. In fact, even during turbulent years, Westshore has managed to stay profitable. In the first quarter of 2025, the company reported revenue of $103.5 million and earnings of $0.55 per share. Its return on equity sat at a healthy 15.84%, showing it continues to use capital efficiently.
The numbers
Now to the income side of the story. Westshore currently pays a quarterly dividend of $0.375 per share, or $1.50 annually. With the share price hovering around $26.30, the stock offers a yield of about 6.54%. That’s significantly higher than what you’d find in a guaranteed investment certificate or savings account, especially in a TFSA where every dollar of dividend income is tax-free.
Of course, no stock is risk-free. Westshore is reliant on coal volumes, and that naturally raises questions about long-term sustainability. However, it’s worth noting that global demand for steel, particularly in developing economies, continues to require metallurgical coal. Until alternate processes are adopted at scale, there’s still a global market for what Westshore ships. The company has also been actively seeking ways to diversify and extend its terminal usage beyond just coal, including exploring potash and other bulk materials. That could open new revenue streams down the road.
Another plus is Westshore’s conservative financial management. It has no long-term debt, which is rare for an infrastructure-heavy company. That puts it in a strong position to weather economic slowdowns or invest in upgrades without stretching its balance sheet. This kind of stability is appealing when looking for a stock to anchor a TFSA income strategy.
Bottom line
If you’re considering how to use $12,000 inside your TFSA, Westshore Terminals offers a compelling mix of steady yield and operational durability. It’s not a growth rocket, but that’s the point. It pays you to wait, to reinvest, or to spend. Whether you’re supplementing your income or building a future cash cushion, those tax-free monthly dividends can add up faster than you think.
In a market where inflation eats into purchasing power and many dividend stocks yield under 3%, locking in over 6.5% tax-free from a company with a proven record is nothing to ignore. Westshore might not be flashy, but in the long run, slow and steady often wins the race, especially in your TFSA.
