Canadian investors are searching for good TSX stocks to buy for a self-directed Tax-Free Savings Account (TFSA) portfolio focused on generating dividends and capital gains.
The TSX is sitting near a record high, so it makes sense to consider companies that have delivered steady dividend growth through a variety of economic conditions.
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Canadian National Railway
Canadian National Railway (TSX:CNR) is arguably a contrarian pick right now. The stock trades near $136 at the time of writing compared to $179 at the high point in early 2024, but is off the 12-month low around $126 and has trended higher in choppy trading over the past six months.
CN operates nearly 20,000 route miles of tracks that connect ports on the Atlantic and Pacific coasts of Canada to the Gulf Coast in the United States. The company moves cargo ranging from crude oil, coal, and cars to lumber, grain, fertilizer, and finished goods.
Tariff uncertainties forced management to reduce guidance last year. The challenging environment is expected to continue through the first half of 2026 as Canada and the United States, along with Mexico, negotiate the extension or revamp of the Canada-U.S.-Mexico Agreement (CUSMA) ahead of a key July 1 deadline for the agreement.
Despite the turbulent conditions, CN remains a very profitable business. CN continues to invest capital in growth projects and is using excess cash to buy back stock while maintaining dividend growth. The board has increased the dividend in each of the past 29 years.
As soon as a trade agreement is finalized between Canada and the U.S., CN should pick up some momentum.
Enbridge
Enbridge (TSX:ENB) is a major player in the North American energy infrastructure and energy utility sectors. The company’s oil pipelines move about 30% of the oil produced in Canada and the United States. The natural gas transmission system carries 20% of the natural gas used by American businesses and homes. In addition, Enbridge is the largest natural gas utility operator in North America. Export facilities and renewable energy assets round out the portfolio.
Enbridge can take advantage of its size to make large strategic acquisitions to drive growth, as it did in 2024 with the US$14 billion purchase of three natural gas utilities in the United States. The company also has the financial capacity to expand through organic projects. The current $35 billion secured capital program, along with contributions from recent acquisitions should deliver steady growth in distributable cash flow to support ongoing dividend increases. Enbridge has increased the dividend annually for more than 30 years. Investors who buy ENB stock at the current price can get a dividend yield of 6%.
Bank of Nova Scotia
Bank of Nova Scotia (TSX:BNS) just hit a new record high.
Management is working through a strategy transition that will see Bank of Nova Scotia shift its growth investments from Latin America to the United States and Canada. The process is well underway with the 14.9% stake in KeyCorp, an American regional bank, that Bank of Nova Scotia purchased in 2024. Last year, Bank of Nova Scotia sold its businesses in Colombia, Costa Rica, and Panama.
Profits and return on equity (ROE) increased in fiscal 2025, but there is more room for improvement as the turnaround program picks up steam. In the meantime, investors can still get a solid 4.3% dividend yield from the stock.
The bottom line
Canadian National Railway, Enbridge, and Bank of Nova Scotia pay good dividends that should continue to grow. If you have some cash to put to work in a TFSA these stocks deserve to be on your radar.
