Investing in top Canadian dividend stocks through a Tax-Free Savings Account (TFSA) is one of the most effective ways to build long-lasting, tax-free passive income. As dividends grow and compound without the tax burden, your money works harder year after year, helping you secure a strong and reliable income stream for the future.
Moreover, you don’t need complicated strategies or constant portfolio adjustments. By choosing high-quality, fundamentally strong companies with resilient earnings power, you can earn steady returns with peace of mind.
Against this background, here are two top Canadian dividend stocks to buy right now with $7,000.
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Canadian Natural Resources
Canadian Natural Resources (TSX:CNQ) is an attractive dividend stock to buy and hold in a TFSA. This oil and gas company has an impressive record of increasing its dividend for 25 consecutive years. Over that period, the payout has increased at a compound annual growth rate (CAGR) of 21%. Moreover, the Canadian energy giant also offers a compelling yield of about 4.9%.
CNQ’s broad portfolio of high-quality, long-life energy assets helps maintain stable production through commodity price cycles. Moreover, its low-decline reserves and balanced product mix generate consistent cash flow, giving management the flexibility to continue boosting shareholder returns even in uncertain markets.
Besides a steady income, CNQ has handsomely rewarded its shareholders with solid capital gains. Over the last five years, the stock has grown at a CAGR of over 32%, translating to capital appreciation of about 303%.
Looking ahead, Canadian Natural is well-positioned to sustain its payouts. Its high-quality assets, strong financials, and focus on strategic acquisitions augur well for growth. Moreover, CNQ’s focus on operating efficiency and profitable growth should allow it to keep generating excess cash to reinvest in the business, strengthen its balance sheet, and increase returns to shareholders.
CNQ also holds a vast inventory of undeveloped land and capital-efficient projects that can be brought online quickly as conditions warrant. These opportunities provide a long runway for future growth.
TC Energy
TC Energy (TSX:TRP) is another compelling Canadian dividend stock to add to your TFSA portfolio. This energy infrastructure has consistently paid and increased its dividends for years. To be precise, the natural gas transporter has hiked its dividend for 25 consecutive years. This solid dividend growth streak reflects the resilience of TC Energy’s business across all market conditions and its ability to generate steady earnings and cash flow.
Nearly all of TC Energy’s earnings (about 97%) stem from regulated operations or take-or-pay contracts. This low-risk operating structure helps protect the company from the ups and downs of commodity markets, allowing it to maintain stability even when energy prices fluctuate. Its vast network of pipelines links affordable natural gas supplies with major demand centers across Canada, the United States, and Mexico. At the same time, its exposure to nuclear, natural gas, wind, and solar assets adds diversity and positions the company to benefit from the ongoing global shift toward cleaner energy.
TC Energy is well-positioned to capitalize on rising global energy demand and the growing need for reliable, lower-emission resources. With plans to invest $6 billion to $7 billion through 2026 in secure, long-term projects, the company is building a stronger future earnings base, which will enable TC Energy to continue growing its dividend by 3% to 5% annually.
