The TFSA (Tax-Free Savings Account) is a popular registered account among Canadians due to its tax-sheltered status. Any returns generated in the TFSA from qualified investments are exempt from Canada Revenue Agency taxes for the life of the account. This makes it an ideal account for buying and holding blue-chip dividend stocks to benefit from a steady stream of passive income, as well as long-term capital gains.
Here are two top TSX stocks you can buy and hold in a TFSA right now.
Is this TSX stock a good buy?
Royal Bank of Canada (TSX:RY) reported solid fiscal Q2 results (ended in April) with adjusted earnings of $4.5 billion, demonstrating resilience amid macroeconomic uncertainty. The bank achieved impressive 16% adjusted pretax pre-provision growth of $971 million, driven by 11% revenue growth from strong volume expansion in Personal and Commercial Banking.
Management took a notably conservative approach to credit provisioning, building $568 million in reserves primarily due to trade policy uncertainty and tariff concerns. This prudent Stage 1 and 2 reserve build, representing 80% macroeconomic scenario adjustments, pushed the allowance ratio to 74 basis points. While gross impaired loans increased by $1.1 billion, 40% of this increase was due to administrative costs related to HSBC integration issues that have since been resolved.
The HSBC Canada acquisition contributed $260 million in earnings, and integration remains on track. Strong deposit growth of 13% in Personal Banking and 15% in Commercial Banking reflects the bank’s market-leading position. Capital Markets delivered record first-half pre-provision earnings of $3.1 billion despite volatile conditions.
RBC’s balance sheet strength enabled a 4% dividend increase and announcement of a $35 million share buyback program. With a 13.2% CET1 (common-equity Tier 1) ratio and diversified revenue streams, RBC appears well-positioned to navigate uncertainty while maintaining its through-the-cycle competitive advantages.
Is this TSX dividend stock a good buy?
In Q1 2025, Canadian Natural Resources (TSX:CNQ) achieved record quarterly production of 1.6 million barrels of oil equivalent per day (BOE/d), including record liquids production of 1.2 million barrels/day. Moreover, oil sands mining operations achieved a record synthetic crude oil production of 595,000 barrels per day, representing a 34% year-over-year increase.
CNQ’s competitive advantage lies in its industry-leading cost structure, with oil sands operating costs of just US$21.88/barrel, approximately US$7–10/barrel lower than peer averages. This translates to incremental annual margins of US$1.2–US$1.7 billion compared to competitors, demonstrating CNQ’s operational excellence.
Strong financial metrics included adjusted funds flow of $4.5 billion and adjusted net earnings of $2.4 billion. The company returned $1.7 billion to shareholders through dividends and share repurchases, while reducing its net debt by $1.4 billion. Management announced a 4% dividend increase, marking the 25th consecutive year of dividend growth with a 21% compound annual growth rate.
CNQ’s recently acquired Duvernay assets are exceeding expectations with 14% capital cost reductions through operational efficiencies. The energy giant reduced its 2025 capital budget by $100 million to $6.1 billion while maintaining production targets. With a diversified asset base, strong balance sheet, and low breakeven costs in the mid-$40 WTI range, CNQ remains well-positioned for continued value creation.
The Foolish takeaway
An investment of $5,000 each in RBC and CNQ stock 10 years back would be worth close to $24,500 today. However, if we adjust for dividend reinvestments, cumulative returns are much closer to $38,000.
