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.
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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.
