Canadian retirees are searching for good dividend-growth stocks to add to their self-directed Tax-Free Savings Account (TFSA) focused on generating reliable and growing passive income that can complement CPP, OAS, and work pensions.
In the current environment with the TSX near its all-time high and economic headwinds potentially on the way in 2026, it makes sense to consider stocks that have long track records of delivering dividend increases through the full economic cycle.
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Enbridge
Enbridge (TSX:ENB) just announced a 3% increase to its dividend. This marks 31 consecutive years of dividend hikes from the energy infrastructure giant.
Enbridge continues to deliver steady growth in distributable cash flow (DCF), supported by acquisitions and development projects.
In 2026, the company expects to deliver adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $20.2 billion to $20.8 billion. Adjusted EBITDA, earnings per share (EPS), and DCF are expected to rise by about 5% per year beyond 2026.
Enbridge plans to put $8 billion in new projects into service next year as it progresses its $35 billion capital program. Revenue from the new assets, along with contributions from acquisitions, should enable ongoing dividend increases.
Enbridge’s share price rebounded over the past two years, supported by lower interest rates in Canada and the United States. Additional rate cuts would reduce debt expenses and free up more cash for debt reduction or dividend payments. Enbridge says less than 15% of its debt is sensitive to interest rate changes.
The stock has enjoyed a nice rally and isn’t cheap today, but investors who buy Enbridge at the current share price can still get a dividend yield of 5.8%. The yield on the investment will rise as dividend growth continues.
Fortis
Fortis (TSX:FTS) has increased its dividend annually for the past 52 years. The board intends to increase the distribution by 4% to 6% per year through at least 2030.
Fortis gets nearly all of its revenue from rate-regulated assets. This means cash flow tends to be predictable and reliable. Businesses in the portfolio include natural gas distribution utilities, power generation facilities, and electricity transmission networks. These are recession-resistant businesses that generate steady cash flow regardless of economic conditions.
Fortis is working on a capital program of about $29 billion over the next five years. Earnings growth from the new assets should support the planned dividend increases. Investors who buy FTS at the current level can get a dividend yield of 3.6%. Lower interest rates in the United States and Canada benefit Fortis, as it uses debt to fund part of the growth initiatives.
Fortis has other projects under consideration that could get added to the capital program. In addition, Canada plans to build a coast-to-coast electricity network. Fortis has the expertise in constructing and operating these types of projects and could potentially play a significant role in the process.
The bottom line
Enbridge and Fortis pay good dividends that should continue to grow as the companies make progress on their large development programs. If you have some cash to put to work in a self-directed TFSA targeting passive income, these stocks deserve to be on your radar.
