TFSA: 2 Dividend Stocks to Buy and Hold Forever

Want tax-free income and growth in your TFSA? These two dividend payers could compound quietly for decades, even through choppy markets.

Amy Legate-Wolfe

Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Before joining Motley Fool Canada, she wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote: “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published December 12, 2025 4:20 pm EST

| More on: AP.UNMFC

Key Points

A TFSA lets dividends and gains grow tax-free, so every dollar stays invested and compounds faster.
Manulife (MFC) delivers steady cash flow, strong capital, and global growth
Allied Properties REIT (AP.UN) trades at a discount yet keeps solid leasing and liquidity

Holding Canadian stocks in a Tax-Free Savings Account (TFSA) for the long run is one of the smartest moves you can make. It lets your money grow tax-free while you collect dividends or ride long-term stock appreciation without ever owing a cent to the CRA. This turns even modest investments into powerful compounding machines, since every dollar earned stays in the account and keeps working for you. And because the TFSA has no withdrawal penalties, you get flexibility alongside growth. This makes it one of the most forgiving and rewarding ways for Canadians to build long-term wealth simply by staying invested. So let’s look at two dividend stocks to get you started.

a person looks out a window into a cityscape — Image source: Getty Images

MFC

Manulife Financial (TSX:MFC) is one of Canada’s largest insurers and wealth managers, serving millions of clients across Canada, Asia, and the United States. It generates steady, predictable cash flow from insurance premiums, asset management, and retirement solutions. Furthermore, it has been actively shifting toward fee-based businesses with higher margins. This combination gives MFC a stable foundation, strong global diversification, and the ability to grow dividends consistently over time. All key traits of a long-term compounder.

Recent earnings for MFC showed solid underlying results, with core earnings rising due to strong insurance sales, disciplined cost management, and continued growth in investment-related income. Its Asian and U.S. businesses contributed meaningfully, and asset-management operations remained a dependable source of fee revenue. The dividend stock also strengthened its balance sheet with improved capital ratios. This left it well prepared for economic uncertainty and supportive of future dividend growth.

MFC offers a mix of stability, steady dividend growth, and global exposure. And this is all from a company that has proven it can navigate shifting interest rates and market conditions. Its payout is well covered by earnings, and its growing presence in Asia gives it a major long-term runway that many Canadian stocks simply don’t have. For TFSA investors looking for reliable, compounding income over decades, MFC fits beautifully.

AP

Allied Properties REIT (TSX:AP.UN) is another strong option. It’s a major owner of office and urban workspace properties across Canada’s key cities, with a focus on tech-centric, mixed-use environments that attract stable tenants. Its properties tend to be high-quality assets in desirable downtown locations, giving it strong long-term occupancy potential and the ability to generate durable rental income. In fact, the real estate investment trust (REIT) has traditionally been viewed as one of the more dependable and well-managed office landlords in the country.

Recent earnings for AP.UN reflected the challenges of the current office market but showed resilience in fundamentals. While vacancies remain elevated industry-wide, Allied maintained solid leasing activity, steady same-asset net operating income, and strong liquidity. The REIT also continued to streamline its portfolio by selling non-core assets and reducing debt, strengthening its financial position for a long-term recovery.

Yet today, AP.UN trades at a deep discount, especially compared to the value of its real estate, while still producing stable income backed by high-quality, irreplaceable urban assets. Long-term investors who can look past short-term office market weakness may be rewarded as occupancy improves and downtown cores continue to revive. The combination of discounted valuation, resilient operations, and reliable distributions makes AP.UN a compelling TFSA hold for patient, income-focused investors.

Bottom line

When you want to put a TFSA to work, dividend stocks are some of the best ways to get started. MFC and AP.UN provide you with ample income, as well as stable growth outlooks. Meanwhile, here is what just $7,000 can bring in from each dividend stock on the TSX today.