You can generate returns by parking your savings in a high-interest savings account. However, the returns you get might pale in comparison to inflation. Stock market investing is one of the best ways to get the most out of your money without worrying about inflation deteriorating the value of your savings.
There are several ways you can approach stock market investing, and there is no one-size-fits-all strategy to it. However, the general idea is to keep a long-term approach in mind when investing in the stock market to maximize returns and increase your chances of achieving financial freedom. Dividend investing is an excellent way to achieve financial freedom.
Building a portfolio of reliable dividend stocks in a self-directed Tax-Free Savings Account (TFSA) can be an excellent approach to consider. There’s no shortage of high-quality dividend stocks to invest in on the TSX. Today, I will discuss a reliable dividend stock that you can consider adding to such a portfolio.
TC Energy
TC Energy (TSX:TRP) is a high-quality TSX dividend stock that boasts a 25-year track record for increasing its quarterly dividend distributions to investors. TRP is an $80.6 billion market-cap energy infrastructure company that boasts an extensive pipeline network spanning the US, Canada, and Mexico. The company also has ownership of or interests in several power-generation facilities.
As of this writing, TC Energy stock trades at $77.45 per share. It pays its investors $0.85 per share each quarter in dividends, translating to a 4.4% dividend yield. TC Energy stock was trading for around $50 just two years ago. This was when the Bank of Canada and the US Federal Reserve finally announced their decision to start cutting down key interest rates.
The central banks decreased interest rates after inflation cooled to the target range. Companies like TC Energy rely on heavy debt loads to fund most of their capital projects due to the investments typically requiring billions. Lower interest rates mean lower borrowing costs, easing the financial pressure on companies like TC Energy.
TC Energy has shored up its balance sheet by monetizing some of its non-core assets, encouraging more and more investors to place more faith in the stock.
The demand for natural gas is only expected to grow. AI data centres require extensive energy, and gas-powered power-generation facilities will become increasingly common. TC Energy’s ongoing capital program is expected to cost up to $7 billion in the medium term, and the company’s management sees plenty of potential for natural gas pipelines to service such facilities.
Foolish takeaway
For the first 9 months of 2025, TC Energy reported stellar results. Its comparable earnings before interest, taxes, depreciation, and amortization (EBITDA) rose from $7.4 billion in the same period the previous year to $7.9 billion. Considering the future prospects and its track record for delivering dividend hikes, TC Energy looks like a good long-term investment to consider.
Building a portfolio of dividend-paying stocks in a TFSA can be a great way to maximize your returns. Any returns in a TFSA grow without incurring taxes, including capital gains, interest earnings, and dividends. By reinvesting the dividends to buy more shares, you can accelerate your wealth growth through the power of compounding.
To this end, TC Energy stock can be a strong foundation for such a portfolio.
