Canadian investors are searching for good TSX stocks to add to their self-directed Tax-Free Savings Account (TFSA) focused on delivering income and total returns.
In the current market conditions in which the TSX is near its record high and economic headwinds could be on the horizon, it makes sense to consider top Canadian dividend growth stocks that have good track records of delivering higher distributions through challenging economic times.
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Fortis
Fortis (TSX:FTS) has raised its dividend in each of the past 52 years and intends to boost the distribution by 4% to 6% annually through at least 2030. The steady dividend growth is a big reason the share price has drifted higher for decades.
Fortis owns natural gas distribution utilities, power generation facilities, and electricity transmission networks in Canada, the United States, and the Caribbean. Nearly all of the revenue comes from rate-regulated assets. This means the company has a good view on what its revenue and cash flow should be as it plans capital investments to drive growth.
Fortis is working on a $28.8 billion capital program that will increase the rate base by a compound annual rate of about 7% over five years. As the new assets are completed and go into service, the boost to cash flow should support the planned dividend hikes.
Fortis has other projects under consideration. In addition, the company would be a good candidate to participate in any of the potential new power grid infrastructure projects that could emerge as part of the Canadian government’s new energy development ambitions.
Fortis trades near $70 per share at the time of writing compared to the 2025 high around $74. Investors who buy the dip can get a dividend yield of 3.6%.
Canadian National Railway
Canadian National Railway (TSX:CNR) is a contrarian pick right now. The stock is down 7% in 2025 and at the current share price of $135 is way off the $180 it fetched in early 2024.
Labour disputes, wildfires, and strikes at key ports caused most of the pain in 2024. The disruptions drove up costs, reduced efficiency, and cut into revenue growth last year, resulting in a drop in adjusted earnings compared to 2023.
In 2025, the year started out on a more positive note, but U.S. tariffs and uncertainty around trade negotiations between the U.S. and Canada forced CN’s management team to dial back guidance.
Despite the challenges and near-term headwinds, CN remains a very profitable company. Management is taking advantage of the low share price to buy back stock with excess cash and is working hard to make the overall business more efficient.
At some point, the U.S. and Canada will iron out new trade terms. When the trade uncertainty is lifted, CN should get a boost.
CN raised its dividend in each of the past 29 years. Investors who buy CNR stock right now can get a dividend yield of 2.6%.
The bottom line
Fortis and CN trade at reasonable prices and pay good dividends that should continue to grow. If you have some cash to put to work in a buy-and-hold TFSA, these stocks deserve to be on your radar.
