Canadian investors are searching for good TSX stocks to add to their self-directed Tax-Free Savings Account (TFSA) portfolios focused on dividends and total returns.
In the current market conditions, with prices near record highs and possible economic turbulence on the horizon, it makes sense to search for companies with a track record of delivering steady dividend payments regardless of the state of the economy.
Fortis
Fortis (TSX:FTS) is a good example of a top TSX dividend-growth stock. The board has increased the dividend annually for more than five decades and intends to extend the streak. This reliability is a key reason the share price has trended higher over the years.
Fortis is a utility company with more than $70 billion in total assets located in Canada, the United States, and the Caribbean. Businesses include natural gas distribution utilities, power generation facilities, and electricity transmission networks.
Nearly all of the revenue comes from rate-regulated businesses. This makes cash flow predictable and reliable, which is ideal for income investors. Fortis grows through a combination of acquisitions and organic projects. The company hasn’t made a large purchase for several years, but Fortis is working on a $26 billion capital program that is expected to support ongoing annual dividend increases of 4% to 6%.
Investors can currently get a 3.5% dividend yield from Fortis. That’s better than most GIC rates available right now, and every dividend increase raises the yield on the initial investment.
Bank of Nova Scotia
Bank of Nova Scotia (TSX:BNS) is up more than 35% in the past six months, but still offers a 5% dividend yield and could have more room to run. The stock trades near $89 at the time of writing. This is still below the $93 it reached in early 2022, and despite the recent bounce, it has trailed the returns of its large Canadian peers in recent years.
Bank of Nova Scotia is working through a strategy transition that will see the company focus more on growth in the United States and Canada and less on Latin America, where the bank previously spent billions of dollars on acquisitions, hoping to benefit from the expansion of the middle class in the region.
Last year, Bank of Nova Scotia invested US$2.8 billion to buy a 14.9% stake in KeyCorp, an American regional bank. The deal provides Bank of Nova Scotia with a platform to expand its U.S. presence. The bank has also indicated plans to grow in Quebec and British Columbia in the domestic market.
Bank of Nova Scotia delivered solid results for the fiscal third quarter (Q3) 2025. Adjusted diluted earnings per share came in at $1.88 compared to $1.63 in the same quarter last year. The bank finished fiscal Q3 with a common equity tier-one ratio of 13.3%. This means Bank of Nova Scotia is sitting on ample capital to enable it to ride out any economic turbulence that might be on the way or to make additional strategic acquisitions.
The bottom line
Fortis and Bank of Nova Scotia pay attractive dividends that should continue to grow. If you have some cash to put to work, these stocks deserve to be on your radar.
