How I’d Invest $250,000 in Canadian Dividend Stocks and Never Worry About Cash Flow Again

The dream of never worrying about money again might feel far-fetched, but with the right mix of Canadian dividend stocks, it’s not as wild as it sounds. While many Canadians chase hot growth stocks or get stuck sitting on cash, there’s a middle path: steady, predictable income that grows over time. If I had $250,000 to invest in my TFSA, I’d split it across three companies that combine dependable income with long-term strength: Royal Bank of Canada (TSX:RY), Toronto-Dominion Bank (TSX:TD), and TELUS (TSX:T). Let’s get into why.

RBC

Let’s start with Royal Bank of Canada, the biggest bank in the country. It recently posted second-quarter results, with net income of $4.4 billion, up 11% year over year. Adjusted earnings came in at $3.12 per share, also up 7%. The dividend was bumped up by 4% to $1.54 per share quarterly. That’s a solid 3.4% annual yield, and the bank continues to grow despite economic headwinds.

Yes, provisions for credit losses rose, with total provisions for credit losses (PCL) hitting $1.4 billion. But the dividend stock still boasts a CET1 capital ratio of 13.2%, comfortably above regulatory minimums. It’s also planning to buy back up to 35 million shares. That kind of capital return should appeal to long-term investors. RBC’s strong personal and commercial banking divisions and recent HSBC Canada integration continue to generate pre-tax earnings growth, up 19% this quarter. It’s a foundation dividend stock, perfect for building income.

TD Bank

Next, I’d look to TD Bank. Its second-quarter earnings came out earlier this year, and TD has historically offered a slightly higher yield than Royal while maintaining a similar level of safety. As of now, the stock yields around 4.1%, paying $1.05 quarterly per share. TD also stands out for its U.S. exposure, especially in retail banking. This gives it growth potential as the U.S. economy rebounds, and that could translate into dividend hikes over time.

The dividend stock has lagged recently, trading at a lower valuation than its peers due to regulatory noise and credit concerns in the U.S., but that could be an opportunity. For a long-term TFSA investor, buying when sentiment is cautious often pays off. With interest rates stabilizing, TD is positioned to keep growing its loan book while managing risk prudently. It’s not as flashy as some tech stocks, but TD is dependable.

TELUS

Now for TELUS. While telecoms have been under pressure due to higher debt costs and capital expenditure (capex) burdens, this dividend stock is bucking the trend. It recently reported first-quarter 2025 results showing free cash flow growth of 22%, with cash from operations up 13%. T stock raised its quarterly dividend to $0.4163, representing an annual yield of about 7.4%. That’s not a typo, over 7%!

The dividend stock also reaffirmed its plan to grow dividends by 3% to 8% annually through 2028. That’s rare in today’s market. Telus continues to grow its mobile and fixed customer base, adding 218,000 customers last quarter, its strongest Q1 ever. What makes TELUS even more interesting is its health segment. Telus Health posted 12% revenue growth and 30% adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) growth. It’s also expanding globally with its acquisition of Workplace Options. So while some see a utility-style stock, TELUS is morphing into something broader, with stable income and exposure to health and tech.

Bottom line

If I were putting $250,000 to work, I’d go with $100,000 in Royal Bank, $100,000 in TD, and $50,000 in TELUS. That spread offers balance between two conservative financials and one high-yield telecom. At today’s dividend rates, that could generate about $11,186 per year in tax-free income annually! And that’s before any dividend increases, which all three dividend stocks have a long track record of delivering.

Could these stocks fall in the short term? Sure. Market corrections happen. But these dividend stocks have weathered recessions, rate hikes, and regulatory changes before. The businesses are essential, dividends are covered by earnings, and each have growth levers beyond Canada.