Building a Dividend Future: How to Use 3 Stocks in Your TFSA

If you’re looking for dividends for your TFSA, these are a great start.

If you want to turn your Tax-Free Savings Account (TFSA) into a long-term dividend engine, the right mix of dependable payers can do a lot of heavy lifting. A strong trio combines stability, steady income, and some growth to keep your portfolio moving forward. BCE (TSX: BCE), Pembina Pipeline (TSX: PPL), and Stella-Jones (TSX: SJ) each bring something different to the table. Together, these could help build a future of reliable, tax-free cash flow.

The TFSA is a powerful savings vehicle for Canadians who are saving for retirement.

Source: Getty Images

BCE

BCE had a rough run over the past year, with shares down nearly 30% from last summer’s highs. The dividend stock’s drop has been driven by slowing wireline growth, regulatory headwinds, and heavy capital investment. But its Q2 2025 results suggest it’s still a force in Canadian telecom. Revenue rose 1.3% year over year to just over $6 billion, net earnings jumped 6.6%, and the dividend stock added almost 95,000 mobile subscribers.

Bell Media posted its fifth consecutive quarter of revenue and earnings before interest, taxes, depreciation and amortization (EBITDA) growth, fuelled by digital expansion and new partnerships. The forward yield now sits around 5.2%, and while the payout ratio looks high, BCE’s cash flow generation remains solid. The risk is that regulation and competition keep pressuring margins. But if earnings stabilize, the stock’s current yield could be an opportunity for long-term income investors.

PPL

Pembina Pipeline has also been dealing with a softer share price, down about 6% over the past year. The energy infrastructure player continues to be a cash flow machine, generating $698 million in adjusted operating cash flow in Q2 2025 on $1 billion of adjusted EBITDA. The dividend stock boosted its 2025 EBITDA guidance to as much as $4.4 billion and announced new long-term agreements, acquisitions, and export projects.

This includes a major expansion at its Prince Rupert Terminal and a tolling deal for additional LPG export capacity. Its growth is underpinned by take-or-pay contracts, which help smooth earnings in volatile commodity environments. The dividend stock yields roughly 5.8%, supported by a payout ratio under 95%. Risks come from project execution, commodity-linked volumes, and regulatory delays, but Pembina’s integrated model and expansion plans give it a strong base for sustained dividends.

SJ

Stella-Jones offers a different angle on dividend investing, with a focus on essential infrastructure products like utility poles and railway ties. Shares have fallen about 14% in the past year, reflecting lower-than-expected sales growth in its utility pole and railway tie segments. Q2 2025 revenue dipped 1% to $1 billion, but EBITDA margins stayed strong at 18.3%, and the dividend stock maintained healthy free cash flow.

The acquisition of Locweld expands its footprint into steel transmission structures, giving it another growth lever in North America’s infrastructure buildout. Management trimmed its full-year sales target but reaffirmed its margin and capital return goals. The dividend yield is more modest at 1.6%, but the payout ratio is under 20%, leaving plenty of room for growth. Risks include reliance on key customers and exposure to macro-driven demand cycles, but the company’s niche market dominance is a long-term advantage.

Bottom line

Combined, these three dividend stocks give a TFSA portfolio diversification across telecom, energy infrastructure, and industrial products. BCE brings high yield and defensive cash flows, Pembina offers yield plus growth from capital projects, and Stella-Jones provides dividend growth potential with an infrastructure tilt. The blend could help smooth out sector-specific risks while giving investors both upfront income and the chance for dividend increases over time. Even now, investing $3,000 in each stock would bring in $365.18 annually.

COMPANYRECENT PRICENUMBER OF SHARESDIVIDENDTOTAL PAYOUTFREQUENCYTOTAL INVESTMENT
BCE$34.6286$1.75$150.50Quarterly$2,975.32
PPL$50.1059$2.84$167.56Monthly$2,955.90
SJ$78.3138$1.24$47.12Quarterly$2,975.78

The trade-off is that none of these stocks is without short-term challenges. BCE faces regulatory pressures, Pembina commodity exposure, and Stella-Jones near-term sales softness. But all three have the balance sheets, market positions, and strategies to keep paying and growing dividends well into the future. For TFSA investors looking to build a tax-free income stream they can count on, this trio might be a solid place to start.

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends Pembina Pipeline and Stella-Jones. The Motley Fool has a disclosure policy.

More on Dividend Stocks

ETFs can contain investments such as stocks
Dividend Stocks

How to Use a TFSA to Generate $200 in Monthly Tax-Free Income

Use a TFSA to build $200 in monthly tax-free income with XEI and ZRE. See how these ETFs work and…

Read more »

Business success of growth metaverse finance and investment profit graph concept or development analysis progress chart on financial market achievement strategy background with increase hand diagram
Dividend Stocks

Smart Ways to Invest Extra Income and Say Goodbye to Financial Stress

Canadians have ways to make their extra income work as hard as they do and say goodbye to financial stress.

Read more »

Two seniors walk in the forest
Dividend Stocks

Sun Life Stock Pays 3.3%: How Much to Invest for $100 a Month in Dividends

Sun Life Financial (TSX:SLF) might be a massive bargain after Thursday's vicious plunge as stock markets sold off hard.

Read more »

TFSA (Tax free savings account) acronym on wooden cubes on the background of stacks of coins
Dividend Stocks

How to Turn Your TFSA Into $1,000 a Month in Tax-Free Income

Build toward $1,000 a month in tax-free income with a TFSA. See how Enbridge, Scotiabank and ZWC could help, and…

Read more »

customer fills up car with gasoline
Dividend Stocks

How Much Emergency Money Do Canadians Actually Need?

A safety fund equivalent to 3 to 6 months of living expenses is generally the baseline buffer that Canadians would…

Read more »

woman holding steering wheel is nervous about the future
Dividend Stocks

Still Up Double Digits This Year: Should You Still Invest in TSX Stocks After Thursday’s Dramatic Drop?

The TSX has gained about 136% over the past decade. So, stay invested, dollar‑cost average, and maintain diversification. 

Read more »

Real estate investment concept
Dividend Stocks

Intact Stock: Would I Buy It for Growth, Income, or Both?

Intact’s modest yield makes profitable long-term growth the main attraction, with catastrophe losses putting the next purchase to a test.

Read more »

hiker with backpack in the mountains
Dividend Stocks

2 Top Canadian Dividend Stocks for $1,850 in Annual Passive Income

With reliable cash flows, high dividend yields, and strong growth prospects, these two Canadian stocks suit income-seeking investors.

Read more »