Every Canadian investor received $7,000 of additional contribution room in their Tax-Free Savings Accounts (TFSAs) in 2025, and many of them must have used it to maximize the account’s potential as an investment vehicle with high-quality dividend stocks. With the page turned and another $7,000 of contribution room to be leveraged, here are three TSX dividend stocks you might want to consider.
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Telus
Telus (TSX: T) is a $29.13 billion market-cap TSX telco that many investors consider a reliable high-yield dividend stock. The company provides critical telecom infrastructure, providing wireless, internet, and data services nationwide. It has a defensive business with recurring revenues. Telus also has several subsidiaries operating across various other sectors of the economy.
Recent years have seen the company focus on network expansions and other capital projects that have weighed down on its free cash flow and forced the company to pause its dividend hikes. The pullback in share prices has also inflated its dividend yield to more attractive levels. As of this writing, Telus stock trades for $18.81 per share and pays quarterly distributions at a juicy 8.90% annualized dividend yield.
Pizza Pizza Royalty
Pizza Pizza Royalty (TSX: PZA) is a $395.86 million market-cap company that owns and franchises quick-service restaurants with brands under its belt. Instead of opening its own locations, the company operates an asset-light business model that lets it earn royalties from system-wide sales through the brand locations across Canada. The model also insulates PZA stock from the impact of overhead costs that traditional restaurant operators typically must contend with.
Its business model lets PZA stock generate reliable monthly revenues. In turn, it pays its investors their shareholder dividends on a monthly schedule. As of this writing, PZA stock trades for $16.08 per share and pays $0.0775 monthly dividends that translate to an annualized 5.78% dividend yield.
Freehold Royalties
Freehold Royalties (TSX: FRU) is a $2.61 billion market-cap company that acquires and manages royalties in the oil and gas sector. The underlying company follows the same principle as PZA stock, but has a different approach. The stock offers investors exposure to profits from the energy industry without any exposure to the impact of operating risks. Freehold collects royalties from energy producers that use its land instead.
The royalty model helps the company minimize capital expense, freeing up more funds and maintaining solid cash flows even during periods of commodity price volatility. Since it isn’t a capital-intensive business model, Freehold also has more funds to allocate to monthly dividends for shareholders.
As of this writing, Freehold Royalties stock trades for $15.94 per share. It pays investors $0.09 per month, translating to a 6.8% annualized dividend yield.
Foolish takeaway
Dividend investing in a TFSA is an excellent strategy to create an additional passive-income stream that does not incur taxes on any returns it provides. These three TSX stocks offer high-yielding dividends that can help you maximize the potential returns on your investment. If you have yet to allocate the additional TFSA contribution room to investments, you can consider adding these to your self-directed portfolio.
