Growing your Tax-Free Savings Account (TFSA) into a million-dollar portfolio doesn’t happen overnight, but it is possible with time, discipline, and the right stocks. The key is to focus on companies that offer both stability and growth. One of the most consistent performers in the Canadian market is Royal Bank of Canada (TSX: RY). As Canada’s largest bank, it has long proven it can deliver income and growth through all kinds of market conditions.
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About RBC
Royal Bank has a market cap of around $245 billion at writing, making it one of the biggest and most stable financial institutions in not just the country but the world. It has a diverse business that includes personal and commercial banking, capital markets, insurance, and wealth management. This mix allows it to generate income from multiple sources and helps cushion the impact when one segment is under pressure.
If you’re investing through a TFSA, dividends matter. And Royal Bank delivers. The dividend stock offers a forward dividend yield of around 3.5% as of writing. That means for every $10,000 invested, you could earn roughly $350 in tax-free dividends each year. Inside a TFSA, those earnings grow without being taxed, and if reinvested, they help power long-term compounding.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | INVESTMENT TOTAL |
|---|---|---|---|---|---|---|
| RY | $174.68 | 57 | $6.16 | $351.12 | Quarterly | $9,958. |
Into earnings
In its most recent earnings report for the quarter ending Apr. 30, 2025, Royal Bank reported adjusted earnings per share of $3.12. That was up from $2.92 during the same quarter in 2024. Revenue climbed 10.7% year over year to $15.7 billion, showing strong momentum in its core business lines. Net income reached $5.1 billion in the first quarter of 2025, a 43% increase over the previous year. That was a record quarter for the dividend stock.
Much of that growth came from the wealth management and capital markets divisions. Wealth management revenue surged 48%, helped by the successful integration of HSBC Canada, which Royal Bank acquired in late 2023. The acquisition added around 780,000 new clients and expanded its presence in the retail and commercial banking space. Capital markets also posted solid gains, with revenue up 24%.
While the overall picture looks strong, Royal Bank is still preparing for possible bumps ahead. The dividend stock increased provisions for credit losses to $1.42 billion, up 55% from a year earlier. That’s a cautious move in case the economy weakens, and more borrowers struggle to repay loans. But even with those provisions, the bank continues to post strong results, which speaks to its resilience.
A solid long-term buy
Valuation-wise, the dividend stock trades at a forward price-to-earnings ratio of around 13. For a bank with this kind of stability and earnings power, that’s a fair price. It also announced a new share buyback program in June 2025, with plans to repurchase up to 35 million shares. That kind of move supports the share price and boosts earnings per share over time.
All this makes Royal Bank a solid choice for any TFSA-focused investor. It offers income through dividends, growth through earnings, and stability through diversification. It may not be the flashiest stock on the market, but when you’re building wealth over decades, boring can be a good thing.
Stocks like Royal Bank do the heavy lifting in a long-term plan. They generate regular cash flow, provide capital appreciation, and help reduce volatility in your portfolio. Inside a TFSA, every dollar of that income and growth goes further because you don’t lose any of it to taxes.
Bottom line
If your goal is to grow your TFSA to a million dollars, Royal Bank of Canada is the kind of dividend stock that deserves a spot at the core of your strategy. It has stood the test of time, delivered consistent performance, and continues to find new ways to grow. Sometimes, the best move isn’t about chasing the next big thing; it’s about choosing what works and sticking with it.
