When it comes to finding high-quality Canadian stocks to buy and hold in your TFSA, dividend stocks are easily some of the best long-term investments.
Dividend stocks are ideal for TFSA investors because they offer steady income, the potential for consistent dividend growth, and the ability to compound tax-free for years. That combination makes them ideal for investors who want to build wealth without having to constantly trade or monitor the market.
And while there are countless dividend stocks to choose from on the TSX, only a handful have the stability, reliability, and long-term track records that make them true buy-and-hold-forever candidates.
These are the types of companies with durable business models, strong competitive positions, and the ability to keep growing their dividends regardless of what the market is doing.
The goal for TFSA investors should not simply be finding the highest yield today, but finding the dividend stocks that can continue paying and potentially even increasing those payouts for decades.
And the best part about finding these dividend stocks to buy for your TFSA is that the longer you hold them, the more valuable your tax-free compounding becomes.
So, with that in mind, here are three of the strongest dividend stocks in Canada that I would buy and hold forever inside a TFSA.
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A top renewable energy stock
If you’re looking for high-quality dividend stocks to buy and hold in your TFSA forever, a great place to start is in industries with decades of growth potential, like green energy. And without a doubt, one of the very best green energy stocks to buy today is Brookfield Renewable Partners (TSX: BEP.UN).
Brookfield Renewable is one of the best dividend stocks to buy and hold in your TFSA because it’s well-positioned, well-managed, and offers a compelling dividend yield that currently sits at more than 5.2%.
Green energy is one of the best industries to invest in for long-term growth. Not only do we have years of transitioning to cleaner energy ahead, but even as we build out more clean energy infrastructure, the global demand for energy is constantly rising every year as well.
And with Brookfield’s access to capital and high-quality management team with years of expertise, it’s easily one of the best dividend stocks to buy in your TFSA. The long-term growth potential alone is compelling, but when you factor in the fact that you get paid a 5.2% dividend to hold the stock as well, it’s certainly a no-brainer investment.
Two of the top TSX dividend stocks to buy in your TFSA
In addition to Brookfield, two more of the best Canadian stocks that dividend investors can buy now are Pizza Pizza Royalty (TSX: PZA) and AltaGas (TSX: ALA).
As a royalty company, Pizza Pizza was made for dividend investors. It has a super simple, super easy-to-understand business model that sees it earn a royalty on all the sales done at Pizza Pizza locations across the country. Plus, it aims to pay out essentially all its earnings, which allows it to offer a compelling dividend yield.
In fact, right now Pizza Pizza offers a yield of roughly 62.%. And with the company looking to find ways to continue growing domestically, as well as expanding its presence internationally, it’s certainly one of the best dividend stocks that TFSA investors can buy today.
AltaGas, on the other hand, is a reliable and defensive energy infrastructure business. What makes AltaGas unique is that it offers stability as a result of its utility operations, but also growth potential thanks to its midstream segment.
Furthermore, in recent years, it has sold off a tonne of non-core assets and reduced its debt considerably, which put AltaGas in a much more sustainable position going forward.
So, if you’re looking for the best Canadian dividend stocks to buy in your TFSA today, AltaGas and its current yield of 3% is one of the best to consider.
