The Canada Revenue Agency (CRA) has set the Tax-Free Savings Account (TFSA) contribution limit for 2026 at $7,000. If you had to invest this entire amount in just one dividend stock, which among the three would you choose?
| Stock | No. of shares for $7,000 | Annual Dividend |
| CNQ | 119 | $279.65 |
| GSY | 63 | $367.92 |
| SRU.UN | 250 | $462.50 |
The first instinct is to say the third stock. It is offering you the highest dividend income. But is this the only criterion?
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Is this the dividend stock you’re looking for?
The third stock is SmartCentres REIT (TSX:SRU.UN), which is the landlord of Walmart. That secures its dividend-paying capacity. However, what you may not know is that this REIT’s unit price has already reached its fair value. It is reinvesting the money to make commercial and residential buildings, and warehouses, which can increase the value of its retail stores. The REIT has not increased its dividend in the last five years. And even before that, it increased dividends by just 2–3%.
SmartCentres has strong fundamentals and a history of no dividend cuts, which makes it a good stock to hold in the long term. However, there is limited share price growth, and the chances of dividend growth look slim. So if you want higher returns now, this is the stock to go all in with your TFSA limit.
Average dividend today for higher passive income tomorrow
If you are up for something risky, the second stock is your pick. But why would you choose $95 in lower income? The second stock is non-prime lender goeasy (TSX:GSY), which is trading near its 16-month low. goeasy stock has dipped almost 50% since September 2025 after a short seller, Jehoshaphat Research’s report, questioned the lender’s definition of delinquency and how it is not reporting them. Otherwise, how can a non-prime lender have a charge-off rate of just 9%?
If there is any truth in the short seller’s report, the growing loan portfolio of goeasy hints at risk instead of returns. The lender called the short-seller’s report misleading. It highlighted data around sufficient loan loss provision, net principal payments, and interest revenue, all of which hint that the loans are not delinquent. They are earning money.
However, the high risk has reduced the share price but not the dividend. For $7,000, you can buy 63 shares of goeasy and get $368 in annual dividends. The risk has a reward, too. goeasy has been growing its dividends at an average annual rate of 30% in the last 11 years. If it can grow its dividend by 15% for the next five years, your $368 could almost double to $740. There is a risk of no dividend growth as well as a dividend cut in the worst-case scenario.
The balanced dividend stock is perfect for a TFSA
On one hand, you have low-risk SmartCentres with stagnant but high dividends. On the other is high-risk goeasy with high growth but a lower current dividend. Canadian Natural Resources (TSX:CNQ) balances both risk and reward. Owning Canada’s largest oil sands reserve, you benefit from its cost advantage over its competitors. It has a good mix of Synthetic crude, WTI, liquified natural gas (LNG), and more.
While CNQ benefits from growing oil and gas prices, its disciplined capital allocation helps it acquire more oil and gas reserves while keeping debt in check. It has been buying more reserves and accelerating debt repayment from the cash flow generated by selling the new produce. It has a lower risk, as the company has a 24-year history of growing dividends at an average annual rate of 20%. As Canada explores new trade partners for its oil and gas, Canadian Natural Resources could have a reason to produce more.
If CNQ can grow its dividend by 15% for the next five years, the $280 annual passive income could double to $562.
Investor’s choice
Where to invest for annual passive income depends not just on the dividend income but also on your risk appetite and your financial goals. Whether you want more passive income now or later, your risk-bearing capacity will determine which among the three to invest in. A better approach would be to diversify the $7,000 amount among the three based on your risk appetite.
