It’s not uncommon for beginner investors to feel the need to constantly monitor the market, try to time every dip, and shuffle their portfolio every few months to be successful. But for Tax-Free Savings Account (TFSA) investors, the opposite is often true. Some of the best long-term results come from finding solid, reliable, high-quality dividend-growth stocks that can quietly grow and compound your capital for years.
You do not need to trade every week or chase whatever is trending. In fact, trying to do that is incredibly difficult. Instead, you’re much better off owning businesses that grow consistently, generate reliable cash flow, and reward shareholders year after year.
That is exactly why dividend-growth stocks are ideal for lazy investors. They never require much maintenance, they steadily increase their payouts, and they let your wealth compound tax-free inside a TFSA.
Even during periods of market volatility, companies with long dividend-growth track records often hold up better than the rest of the market, because their earning power is almost always tied to essential parts of the economy.
Furthermore, when you combine that stability with consistent dividend increases, you get returns driven as much by predictable income as share-price appreciation.
So, if you’re looking for a high-quality dividend-growth stock to buy in your TFSA and hold for years or even decades to come, here’s why Canadian Utilities (TSX: CU) is a top pick.
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The ultimate dividend-growth stock
There’s no question that Canadian Utilities is a stock that a TFSA investor can buy once and comfortably hold forever. It is one of the most reliable dividend-growth stocks on the entire TSX, backed by a business model built on regulated, contract-backed earnings.
The dividend-growth stock operates electricity and natural gas utilities across Alberta, Saskatchewan, parts of northern Canada, and internationally, and its cash flow comes from essential services that households and businesses need regardless of what the economy is doing.
This is exactly the type of stability lazy investors should be looking for. Canadian Utilities’s operations are largely rate-regulated, which means it earns predictable, inflation-linked returns on the infrastructure it builds.
That’s what makes it the perfect dividend-growth stock. The steady and predictable cash flow allows the company to consistently increase the dividend while also retaining capital to invest in future growth.
And its track record over multiple decades and every type of market environment imaginable shows just how reliable an investment it is. In fact, Canadian Utilities holds the longest dividend-growth streak in Canada at more than 50 years.
It’s worth noting that compared to some of its peers, Canadian Utilities’s growth is slightly more modest; however, the trade-off is reliability. Its asset base includes a diversified mix of regulated natural gas and electricity operations, along with exposure to Alberta’s energy corridor, which continues to play a major role in Canada’s economy.
In addition, unlike many of its peers, Canadian Utilities still trades at a reasonable valuation, at just 16.9 times forward earnings and offering a current dividend yield of 4.4%.
So, if you’re looking for a dividend-growth stock to buy in your TFSA and hold for years, Canadian Utilities is undoubtedly a top choice.
