Canadian investors can turn their Tax-Free Savings Account (TFSA) into a cash-gushing machine by owning quality dividend stocks in the account. In addition to a steady stream of passive income, the best dividend stocks offer the potential for long-term capital gains, both of which are exempt from Canada Revenue Agency taxes.
While the maximum cumulative TFSA contribution room has increased to $109,000 this year, here are two top dividend stocks you can own right now.
Is this restaurant stock a good buy?
Valued at a market cap of $22.3 billion, Restaurant Brands International (TSX:QSR) owns and operates iconic global brands such as Burger King, Tim Hortons, and Popeyes.
Restaurant Brands International is executing a strategic simplification that should resonate with investors who have long valued the company’s asset-light franchise model.
- Tim Hortons Canada and the international segment have delivered 18 consecutive quarters of positive same-store sales, accounting for 70% of adjusted operating income. Yet investors remain focused on the U.S. business, which comprises just 17% of profits.
- Tim Hortons maintains the number one position in value for money in Canada with a medium cold brew priced at $2 and breakfast sandwiches at $3, helping drive impressive comp growth despite softer consumer confidence.
- The Burger King China transaction exemplifies the simplification strategy. Restaurant Brands acquired the business in February 2025, turned negative same-store sales into 10% growth in recent quarters, and then sold it to CPE, injecting $350 million in fresh capital.
- This represents the largest primary capital investment to any Restaurant Brands master franchise in the company’s history. The deal starts with roughly 3% royalties, which increase to the standard 5% as performance targets are met.
Management expects China to shift from negative net unit growth in 2025 to modestly positive expansion in 2026, a key driver for accelerating overall development. The company targets 5% net unit growth by 2028 after resetting to approximately 3% in 2025.
Firehouse Subs added 100 net new units over the past four quarters, representing three to four times the pace when Restaurant Brands acquired the brand.
Refranchising the Carrols restaurants acquired for $1 billion has accelerated ahead of schedule. Initially planned for years three through seven, Restaurant Brands will refranchise 50 to 100 locations in 2025 with expectations for increased activity in 2026.
Tim Hortons plans modest positive unit growth in Canada after years of maintaining its base, while international markets like France have grown into $2 billion revenue businesses over the past decade.
Analysts tracking QSR stock forecast the annual dividend per share to increase from $3.43 in 2025 to $4 in 2028. Today, it offers shareholders a yield of 3.5%.
If the TSX stock is priced at 30 times forward earnings, it could surge by more than 30% over the next two years, after accounting for dividends.
Is this energy stock a good buy?
Another Canadian dividend stock with a forward yield is Cenovus Energy (TSX:CVE). Cenovus Energy delivered record upstream production of 833,000 barrels of oil equivalent per day in the third quarter, demonstrating the payoff from years of strategic capital investments as multiple growth projects approach completion.
The Canadian oil sands producer generated $2.5 billion in adjusted funds flow while returning $1.3 billion to shareholders through dividends and share buybacks.
Oil sands assets hit an all-time high of 643,000 barrels per day, driven by standout performance across the portfolio. The downstream business delivered strong results with record U.S. refining throughput of 605,000 barrels per day at 99% utilization.
Operating costs in the U.S. refining segment dropped to $9.67 per barrel, down $0.85 from the prior quarter and over $3 per barrel compared to the same period last year. The sale of the Wood River and Borger refinery joint venture closed at quarter’s end for $1.8 billion in cash proceeds, giving Cenovus full operational control of its remaining downstream assets.
If the TSX energy stock is priced at 10 times forward earnings, it could surge 30% over the next three years. If we adjust for dividends, total returns could be closer to 40%.
