Canadian pensioners are searching for ways to generate reliable retirement income inside a self-directed Tax-Free Savings Account (TFSA) to complement the Canada Pension Plan (CPP), Old Age Security (OAS), and other pension earnings.
One popular TFSA investing strategy involves owning top TSX dividend stocks that have solid track records of delivering steady and growing distributions.
Source: Getty Images
Enbridge
Enbridge (TSX: ENB) trades near $65.50 at the time of writing, down about $5 from the 2025 high. This gives investors who missed the big rally over the past two years a chance to buy ENB stock on a nice dip.
The energy infrastructure giant should benefit from ongoing cuts to interest rates in Canada and the United States as the central banks continue their pivot from fighting inflation to supporting the economy. Enbridge and other companies in the pipeline and utility sectors use debt to fund capital projects that can cost billions of dollars and sometimes take years to complete. Falling interest rates can lead to lower debt expenses. This frees up more cash that can be used to pay down debt or cover dividends.
Enbridge is currently working on a $32 billion capital backlog that is expected to drive steady expansion of revenue and cash flow in the next few years. This should support ongoing dividend growth. Enbridge has increased the dividend annually for the past three decades. Investors who buy ENB at the current level can get a dividend yield of 5.7%.
TC Energy
TC Energy (TSX: TRP) trades near $70 per share. It was as high as $77 earlier this month. Investors can now get a 4.8% yield from the Canadian natural gas transmission and storage firm. TC Energy also has power generation facilities.
Management has done a good job of monetizing non-core assets over the past couple of years to shore up the balance sheet. TC Energy had to take on extra debt to complete its Coastal GasLink pipeline, which saw its budget more than double to roughly $14.5 billion. The 670 km pipeline is now in service, moving natural gas from Canadian producers to the new LNG Canada export facility on the coast of British Columbia.
TC Energy recently completed another major pipeline project in Mexico. The 715 km natural gas pipeline cost about US$3.8 billion and came in about 13% under budget.
Revenue from the two new pipelines, along with a portfolio of other projects, will help drive cash flow growth. TC Energy is targeting investments of roughly $6 billion per year over the medium term. This should support steady dividend hikes. TC Energy has increased the dividend annually for the past 25 years. The current dividend yield is 4.8%.
Bank of Nova Scotia
Bank of Nova Scotia (TSX: BNS) is up 34% in the past six months and now trades near its 12-month high. Investors, however, can still pick up a solid 4.8% dividend yield. More upside could be on the way. The stock has trailed the performance of its large Canadian peers in recent years.
Bank of Nova Scotia is working through a turnaround plan that includes reducing operating costs while shifting growth investment away from Latin America to the United States and Canada. The new CEO is reducing staff and has already acquired a 14.9% stake in Key Corp, a U.S. regional bank. This investment gives Bank of Nova Scotia a platform to expand its American presence. Earlier this year, the bank sold its operations in Colombia, Costa Rica, and Panama.
Lower interest rates should help ease pressure on businesses and homeowners who are carrying too much debt. As long as the economy holds up, provisions for credit losses should decline in the coming quarters.
The bottom line
Enbridge, TC Energy, 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.
