Canadians are more concerned than ever about their financial futures. According to a recent BMO Real Financial Progress Index survey, worries about the cost of living jumped to 78% in April 2025, up from 61% in March. Inflation fears also rose by 16 points, with 76% of respondents saying they felt more concerned. Add in fears about a possible recession, job loss, and tariffs, and it’s no wonder that investors are looking for stability. For those with a Tax-Free Savings Account (TFSA), dividend income is one of the safest ways to build financial confidence in uncertain times. Two strong TSX stocks to consider for this purpose are Freehold Royalties (TSX: FRU) and Pembina Pipeline (TSX: PPL).
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Freehold Royalties
Freehold Royalties has proven to be a steady performer. It’s not involved in oil and gas production directly but earns royalty income from producers across North America. That model helps reduce risk while still benefiting from strong commodity prices. In its first quarter of 2025, Freehold reported revenue of $91 million and funds from operations of $68 million, or $0.42 per share. That more than covered its dividend of $0.27 per share. Average production also climbed to a record of over 16,000 barrels of oil equivalent per day. These results point to a dividend stock that’s delivering dependable cash flow and income.
The yield is a standout. At its recent share price of around $12.72, Freehold offers a dividend yield of about 8.4%. That’s hard to beat in today’s market. Its payout ratio remains reasonable at nearly 60%, suggesting the dividend is well supported. It also operates with low debt and has royalty interests across both Canada and the United States. That gives it diversification and long-term sustainability. For TFSA investors looking for high monthly income, Freehold checks a lot of boxes.
Pembina Pipeline
Now, let’s turn to Pembina Pipeline. This energy infrastructure company is a staple of the Canadian market. It owns and operates pipelines, storage facilities, and gas processing plants, moving critical commodities across Western Canada. In 2024, Pembina reported adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $4.41 billion and net income of $1.87 billion. It ended the year with strong cash flow and a stable outlook despite some volatility in energy markets.
In May 2025, Pembina raised its quarterly dividend to $0.71 per share, which works out to $2.84 annually. At a current share price near $51, that gives investors a yield of around 5.4%. It may not be as high as Freehold’s, but Pembina offers long-term reliability. Its contracts are largely fee-based, meaning it earns steady income regardless of oil or gas prices. That’s a big benefit when markets are choppy.
Pembina’s dividend has also been growing. It’s raised its payout over the years as earnings have grown, and that trend could continue. With new infrastructure projects underway and strong demand for Canadian natural gas, Pembina’s future looks stable. That makes it a strong anchor in any dividend-focused TFSA.
Creating income
So, how could you build income with these two? If you invested $3,500 into Freehold, you’d earn about $300 annually or $24.75 per month. Put the other $3,500 into Pembina, and you’d earn around $193 annually or about $16 per month. Combined, it comes to $490.12 a year, or roughly $40.84 per month, all tax-free inside a TFSA. And if you reinvest those dividends, your income could grow even faster.
| COMPANY | RECENT PRICE | AMOUNT INVESTED | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | INVESTED TOTAL |
|---|---|---|---|---|---|---|---|
| FRU | $12.72 | $3,500 | 275 | $1.08 | $297.00 | Monthly | $3,498.00 |
| PPL | $50.96 | $3,500 | 68 | $2.84 | $193.12 | Quarterly | $3,464.96 |
Both of these stocks also pay dividends monthly, which is great for those looking for regular cash flow. Over time, that consistency makes it easier to budget, plan, or reinvest. You’re not waiting for quarterly payouts; you’re getting income every month.
Bottom line
With more Canadians worried about their financial well-being, steady income is a powerful tool. TFSAs offer a place to grow that income without paying tax on it, and picking the right stocks is key. Freehold Royalties and Pembina Pipeline offer high yields, strong fundamentals, and consistent payouts. For TFSA investors, that’s a recipe for peace of mind and progress.
