Developing a solid TFSA strategy doesn’t require dozens of stocks or complex allocations. All it needs is a simple, focused approach that can provide the long-term income that most investors want.
The easiest way to accomplish that goal is to select two reliable Canadian dividend stocks to form the foundation of that TFSA strategy. And while there are more than a few great candidates to choose from, there are two solid options that can provide the growth, income, and resilience that are needed in a TFSA.
Here’s a look at those two stocks
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The utility stock that can strengthen a long‑term TFSA strategy
Emera (TSX: EMA) is the first stock to help ground a TFSA strategy. Emera is one of Canada’s most dependable utility companies, and that stability is what long‑term TFSA investors seek.
As a regulated utility stock, Emera generates a recurring revenue stream from electricity and natural gas distribution. These are essential services that translate into predictable earnings, leaving room for both growth and dividend investment.
Emera’s regulated business also helps to shield it from economic swings, making it a steady anchor in a diversified portfolio.
Emera’s growth is focused on long‑term infrastructure projects that support gradual earnings growth over time.
Turning to dividends, Emera boasts a quarterly dividend that pays a yield of 3.9%.
For investors seeking a TFSA strategy, Emera is a perfect fit. The TFSA’s tax‑free structure amplifies the benefits of slow‑and‑steady compounding. Emera’s dividend track record adds another layer of appeal. Utilities are known for reliable payouts, and Emera has demonstrated a commitment to maintaining and growing its dividend through various market cycles.
In short, Emera offers a defensive profile that naturally fits into a TFSA strategy focused on long‑term wealth building.
Bank of Nova Scotia can add income and recovery potential
Bank of Nova Scotia (TSX: BNS) is the second stock to add to a TFSA strategy. Scotiabank offers a different but complementary strength to a TFSA that includes both income and growth.
As one of Canada’s big bank stocks, Scotiabank has a long history of paying dividends that extends back well over a century. In fact, Scotiabank’s yield is the highest across the big banks. As of the time of writing, Scotiabank offers a yield of 4.4%.
Scotiabank has also provided annual increases to that dividend going back over a decade.
For TFSA investors, that income becomes even more valuable because it can be reinvested tax‑free, allowing it to compound over time.
Beyond dividends, Scotiabank also offers growth potential. The bank is known as Canada’s most international bank, boasting a presence in higher-growth markets around the world.
In recent years, Scotiabank has shifted away from developing markets, particularly in Latin America, to more established markets in Mexico and the U.S. That combination of income and growth potential makes Scotiabank a useful component to any TFSA strategy.
Build your long-term TFSA strategy today
While no stock is without risk, Emera and Scotiabank offer investors a combination of stability, income, and long‑term growth potential.
Both stocks also offer strong defensive appeal, making them ideal for a TFSA strategy.
In my opinion, one or both should be core holdings in any well-diversified portfolio.
