With the TSX continuing to hit new record highs, investors are wondering which top Canadian dividend stocks are still attractive to buy for a self-directed Tax-Free Savings Account (TFSA) focused on generating reliable and growing passive income.
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Fortis
Fortis (TSX:FTS) trades near $70 per share at the time of writing. The stock is up about 18% in 2025 and is close to its 12-month high.
The Bank of Canada cut its target interest rate on September 17, and more reductions could be on the way in 2026 as the central bank switches its focus from fighting inflation to supporting the economy. This is the main reason the stock moved higher in recent weeks.
Utility stocks like Fortis use debt to fund part of their large development programs. Lower borrowing expenses can boost profits and increase cash available for distributions. Fortis is working on a $26 billion capital program that will increase the rate base from $39 billion in 2024 to $53 billion in 2029. An updated five-year projection is expected when Fortis provides its third-quarter (Q3) 2025 results.
Under the current investment schedule, Fortis expects cash flow from the new assets to support planned annual dividend increases of 4% to 6% over five years. Additional projects are under consideration that could extend the growth outlook. Fortis could potentially be an active player in Canada’s new plan to build a cross-country power grid. Fortis owns and operates electricity transmission assets and power generation facilities, along with natural gas distribution utilities.
Fortis raised the dividend in each of the past 51 years. Investors who buy FTS stock at the current level can get a dividend yield of 3.5%.
Enbridge
Enbridge (TSX:ENB) has increased its dividend annually for the past three decades. The stock has enjoyed a nice rally over the past year, but still offers a solid 5.4% dividend yield at the current price.
Enbridge is similar to Fortis in that it uses debt to fund growth initiatives. As such, the reduction in interest rates should be positive for the company. Enbridge continues to expand its portfolio through acquisitions and organic projects. The company spent US$14 billion in 2024 to buy three natural gas utilities in the United States. The deal made Enbridge the largest natural gas utility operator in North America.
In addition, Enbridge is working on a $32 billion capital program. As new assets are completed and go into service, the company expects to deliver steady growth in adjusted earnings and distributable cash flow that should enable the board to continue raising the dividend.
Alberta is pushing to get a new oil pipeline approved and built to connect producers to the northern coast of British Columbia as part of Canada’s goal of reducing its reliance on sales to the United States. Enbridge is a giant in the energy infrastructure industry and could potentially be a partner on the project.
The bottom line
Fortis and Enbridge pay good dividends that should continue to grow. If you have some cash to put to work in a portfolio focused on dividend income, these stocks deserve to be on your radar.
