Income-seeking investors should consider holding blue-chip dividend stocks in a TFSA (Tax-Free Savings Account) to benefit from a passive-income stream. In addition to steady dividend income, Canadians can boost investment profits from long-term capital gains, both of which will be exempt from taxes if held in a TFSA.
So, let’s see where you can invest $24,000 in the TFSA for constant income in 2025 and beyond.
Is this TSX bank stock a good buy?
Valued at a market cap of $110.6 billion, Bank of Nova Scotia (TSX:BNS) is among the largest banks in Canada. In the last decade, the TSX stock has returned 56% to shareholders. However, if we adjust for dividend reinvestments, cumulative returns are much higher at 162% Despite these market-beating returns, BNS stock currently offers you a dividend yield of 5%.
BNS has increased its annual dividend from $2.88 per share in 2024 to $4.24 per share in 2024. Analysts forecast its dividend to rise to $4.87 per share in 2029.
Scotiabank is a compelling turnaround story, given that CEO Scott Thomson’s strategic transformation has reached an inflection point. Seven quarters into the journey, the bank has successfully shifted from volume-focused growth to value-driven client relationships.
This pivot is generating tangible results, with Global Banking & Markets achieving a 29% increase in fee income despite reducing balance sheet exposure by 14%.
The Canadian retail banking operation, which has historically been an underperformer, is showing encouraging signs of recovery. Sales effectiveness has improved 11% year over year, deposit market share has grown 70 basis points, and the bank is targeting positive operating leverage by 2026.
Management’s focus on underserved segments, such as credit cards, small business, and commercial mid-market, positions BNS to capture market share in higher-margin businesses where it has been historically underweight.
Credit quality remains well-managed, despite macroeconomic uncertainties, with impaired provision for credit losses (PCL) ratios declining and a strengthened balance sheet featuring $2 billion in provisions.
Management’s confidence in achieving double-digit earnings growth in 2026 and beating medium-term targets reflects the operational momentum building across business lines. The strategic foundation appears solid for sustained profitable growth as the optimization phase transitions to expansion mode.
Is this REIT still a good buy?
Valued at a market cap of $3.5 billion, Dream Industrial (TSX:DIR.UN) owns, manages, and operates a portfolio of industrial properties. The TSX dividend stock has almost tripled shareholder returns in the last decade, after adjusting for dividends. Today, it offers you a yield of over 5%.
In the second quarter (Q2), Dream Industrial reported funds from operations (FFO) per unit growth of 4%, while net operating income (NOI) grew by 5%, driven by a 9.5% in-place rent increase and strong leasing spreads averaging 20%. Dream Industrial signed 3.3 million square feet of leases since Q1, improving its occupancy rate by 190 basis points to 96%.
The capital-recycling strategy remains active, with $139 million in acquisitions completed and $100 million in dispositions under negotiation. The strategic Richmond Hill acquisition for $60 million exemplifies the real estate investment trust’s (REIT’s) focus on high-barrier markets, offering nearly 6% average annual NOI growth over five years through existing rent steps and mark-to-market opportunities.
The REIT ended Q2 with a net-debt-to-earnings before interest, tax, depreciation, and amortization of 8.2 times and over $900 million in liquidity.
Given consensus price targets, the TSX stock currently trades at a 11% discount. If we account for dividends, cumulative returns could be closer to 17% over the next 12 months.
