3 Dividend Stocks That Put Your Money to Work While You Sleep

Worried about finances at night? These three TSX dividend stocks can help build reliable, tax-free TFSA income.

Amy Legate-Wolfe

Author Bio Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Her work can also be found at Canada's National Observer, where she writes on the business side of climate action. Before joining Motley Fool Canada, Amy wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Social Media Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published September 24, 2025 8:30 pm EDT

| More on: BCECPXPOW

Key Points

BCE offers about a 5.5% yield but has a high payout ratio and debt, so it's a high-yield, higher-risk income pick.
Power Corporation yields roughly 4.3% with a moderate payout and diversified insurance businesses benefiting from higher interest rates.
Capital Power pays about 4.2%, has 12 years of dividend increases, and grows through U.S. renewables despite higher debt.

Most Canadians have one thing that’s top of mind every night when they go to sleep, and that’s finances. Whether it’s paying for your retirement, your mortgage, or just getting groceries, finances are incredibly stressful. But, they don’t have to be.

If you have a bit of cash you can set aside, we can put that cash to work for you. And you can unlock even more growth potential from that cash inside of a Tax-Free Savings Account (TFSA), helping you create tax-free income that lasts. So let’s get right into it.

earn passive income by investing in dividend paying stocks — Source: Getty Images

BCE

The first dividend stock I would consider for long-term investment that provides substantial dividend income is BCE (TSX: BCE). This telecom stock offers a compelling forward annual dividend yield at around 5.5% as of writing. This is incredibly attractive for those seeking income, though it does come with risks. Specifically, investors will need to watch the high payout ratio even after the company sliced its dividend.

This adjustment was to help BCE’s overall financial health, as it struggled with poorer performance that brought down the company’s share price. Yet overall, that might also mean you’re getting a solid dividend stock for a steal. The telco recently reported a 6.6% increase in net earnings, partially from reduced expenses. So even though the stock still has high debt, it has been chipping away at it.

Furthermore, it’s still expanding by investing heavily in fibre and acquiring Ziply Fiber to drive growth. That’s while also selling off MLSE to help its bottom line. So while shares might be down for BCE stock, it’s a dividend stock that could create massive income along with returns for investors.

POW

Next up, we have Power Corporation of Canada (TSX: POW), which also has a substantial dividend yield at 4.3% as of writing. Here, the dividend looks quite steady with a payout ratio of 55.4% as of writing. This shows dividends are stable while earnings continue to grow.

And it’s clear why. This dividend stock is in the insurance sector, where high interest rates actually benefit its investments in bond yields. Furthermore, it has been using this time to expand further, providing robust investment income and capital appreciation potential. All while adjusted net earnings continue to increase year over year.

All considered, POW is a stable dividend stock that continues to grow through strategic expansion opportunities. It now holds a diverse set of businesses that lower the risks associated with any single segment underperforming.

CPX

Finally, we have Capital Power (TSX: CPX), also offering a great 4.2% dividend yield. What’s more, it has a solid track record with 12 consecutive years of dividend increases behind it. What’s more, the dividend stock continues to expect more growth amidst ongoing expansions and enhancements in its United States portfolio. This helps position it well for future cash flow.

Those expansions include recent strategic acquisitions such as the Hummel and Rolling Hills facilities. They have bolstered its asset base, sure, but also increased its debt. Yet while the company recently experienced a net loss, it has still managed to generate strong adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) and adjusted funds from operations (AFFO).

Therefore, this dividend stock remains a strong choice, especially as its expands its renewable energy footprint while leveraging its flexible generation strategies throughout North America. CPX stock is thus a strong long-term hold, offering stable dividend income in the mean time.

Bottom line

Together, these dividend stocks come with their own set of advantages and disadvantages. Yet there are a few themes here. First, all three remain undervalued given near-term volatility. Second, these are long-term buys that have already proven over decades to be stellar holds. And finally, each offers a reasonably high dividend yield and a history of commitment to that dividend for shareholders. So if you’re having trouble sleeping, you can hold these dividend stocks knowing the future will look brighter each day that goes by.