Investing in quality dividend stocks allows you to benefit from a steady stream of dividend income as well as long-term capital gains. Moreover, the best dividend stocks grow their cash flows across market cycles, enabling them to increase these payouts annually.
In this article, I have identified two top TSX dividend stocks that TFSA (Tax-Free Savings Account) investors should buy right now. As the name suggests, any returns earned from qualified investments in this popular registered account are exempt from taxes.
Is this TSX dividend stock a good buy?
In Q2 2025, Bird Construction (TSX:BDT) reported adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) margins of 6.5%, up from 5.3% last year, while gross profit margins improved to 10.6% from 8.6%.
Bird’s strategic focus proved effective as it secured nearly $1.2 billion in new awards during the quarter, bringing total backlog to a record $4.6 billion. This backlog offers strong visibility with favourable embedded margins compared to the prior year’s levels. Bird’s pending backlog includes over $800 million in master service agreements spanning five years.
However, revenue declined 2.6% year-over-year to $850.8 million due to client-driven project delays amid macroeconomic uncertainty. Notably, industrial and private sector clients accounted for 70% of these delays, as customers seek clarity on trade policies and face cost pressures before proceeding with capital investments.
Bird’s latest strategic acquisition of Fraser River Pile & Dredge for $82.3 million strengthens its infrastructure capabilities by adding expertise in marine construction, land foundation, and dredging. The transaction is expected to be 7% accretive to adjusted earnings per share while contributing approximately $160 million in annual revenue and $20 million in EBITDA.
Management remains confident in achieving its 2027 target of 8% EBITDA margins, with only 120 basis points remaining to reach this goal.
Analysts tracking the TSX dividend stock forecast free cash flow to more than double from $84 million in 2024 to $178 million in 2027. This cash flow expansion will enable Bird to raise its annual dividend from $0.59 per share in 2024 to $1.12 per share in 2027.
Is this TSX stock undervalued?
Another TSX dividend stock to consider is MTY Food (TSX:MTY), a company that operates and franchises quick-service, fast-casual, and casual dining restaurants in Canada, the United States, and internationally.
While Canadian operations showcased resilience in Q2, MTY was impacted by sluggish U.S. sales. Canadian same-store sales increased by 1.4%, while U.S. operations declined by 3.8% due to broad-based consumer weakness across all restaurant segments and banners.
MTY’s normalized adjusted EBITDA fell 5% due to corporate store performance, which was partially by design. The company acquired nearly 50 underperforming Papa Murphy’s locations with turnaround potential, temporarily pressuring margins. Corporate store EBITDA margins of 9% remain at acceptable levels given the portfolio composition, while the franchising segment delivered 3% growth.
Digital initiatives continue to gain traction, as digital sales grew by 3% to account for 21% of total system sales. MTY has enhanced product innovation capabilities, with most brands now planning launches 12–15 months in advance compared to just a few months previously.
Analysts tracking the TSX stock forecast adjusted earnings to increase from $4.20 per share in 2024 to $4.50 per share in 2027. In this period, its dividend per share is expected to increase from $1.12 to $1.84.
