Introduced in 2009, the Tax-Free Savings Account (TFSA) is a popular registered account among Canadians. The TFSA allows you to hold a variety of qualified instruments and benefit from tax-free gains for life.
One low-cost way to generate a tax-free passive income stream is to hold quality dividend stocks in the TFSA. In addition to steady dividend income, Canadian investors should also benefit from long-term capital gains.
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Is this TSX dividend stock a good buy?
Valued at a market cap of US$15.4 billion, Brookfield Infrastructure Partners (TSX:BIP.UN) operates critical infrastructure assets across four key segments globally. The Utilities segment manages transmission lines, gas pipelines, and energy solutions. Transport includes 21,000 km of track and 3,300 km of motorways for cargo and passenger services. Midstream operates 15,000 km of gas transmission pipelines, 570 billion cubic feet of storage, and 16 processing plants. The Data segment features 306,000 telecom towers, 28,000 km of fibre cables, 140 data centres with 1 gigawatt capacity, and two semiconductor foundries.
In 2025, Brookfield Infrastructure offers shareholders an annual dividend of US$1.72 per share, up from US$0.49 per share in 2010. Today, the TSX dividend stock pays investors a forward yield of over 5%, making it an attractive option for income seekers.
Brookfield Infrastructure Partners delivered solid first-quarter results with funds from operations (FFO) of US$646 million or US$0.82 per unit, representing a 12% increase when normalized for foreign exchange impacts.
The partnership’s diversified portfolio demonstrated resilience across all segments. Data operations drove growth with a 50% FFO expansion, fueled by strong organic performance in data centre platforms and contributions from a tower acquisition in India. Midstream operations generated US$169 million in FFO, up 8% adjusted for capital recycling and currency effects, benefiting from elevated activity levels and higher pricing for marketed products.
Utilities FFO reached US$192 million, reflecting inflationary benefits and US$450 million in capital commissioned into rate base over the past year. The transport segment’s FFO totalled US$288 million, with record utilization at global intermodal logistics operations offsetting volume contractions in the rail and port businesses.
A focus on capital recycling
Capital recycling activities gained momentum with US$1.4 billion in secured sale proceeds, keeping the partnership on track for its US$5–6 billion asset sale program. The company signed an agreement to exit its Australian container terminal operation for US$1.2 billion, generating a 17% internal rate of return (IRR) and a capital multiple of four over nine years of ownership.
New investment opportunities remain robust, highlighted by the US$9 billion acquisition of Colonial Enterprises, which provides BIP with a US$500 million equity stake in America’s largest refined products pipeline system. The transaction offers mid-teen cash yields with transparent regulatory frameworks and direct inflation linkage.
Management expressed confidence in navigating tariff-related uncertainties, emphasizing the partnership’s insulated position as owner of irreplaceable, highly contracted infrastructure networks.
Moreover, BIP’s focus on usage fees rather than goods production minimizes direct tariff exposure, while contractual frameworks and pricing power provide inflation pass-through capabilities.
Three primary objectives for 2025 include delivering organic growth through capital project execution, advancing the investment pipeline amid strengthening digitalization and onshoring megatrends, and completing asset monetization to self-fund new investments.
The Foolish takeaway
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY |
| Brookfield Infrastructure | $33.34 | 1,500 | $0.43 | $645 | Quarterly |
An investment of $50,000 in the blue-chip stock would help you purchase 1,500 shares of the company and earn $2,580 in annual dividends. According to consensus estimates, this payout could increase to more than $3,000 by 2029, enhancing the effective yield to 6.2%.
TFSA investors should identify other such quality TSX dividend stocks and create a diversified portfolio of income-generating assets.
