1 TSX Dividend Stock That Could Be a Lifetime Buy

Do you want a “forever” dividend stock? This power producer blends steady contracts with the coming surge in AI-driven electricity demand.

Amy Legate-Wolfe

Author Bio

Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Her work can also be found at Canada's National Observer, where she writes on the business side of climate action. Before joining Motley Fool Canada, Amy wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband.

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“October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published May 12, 9:00 pm EDT

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Key Points

TransAlta is a diversified power generator shifting from coal and signing long-term deals to grow cash flow.
It just raised its dividend again, backed by solid operations and management’s strong EBITDA guidance.
AI data centres and electrification could tighten Alberta’s power market, making TransAlta’s assets more valuable over time.

A lifetime is a long time; I get it. So, suggesting a dividend stock that could be a lifetime buy is a bit of a statement when we’re looking at dividend stocks that offer that kind of stability. But here’s the thing: that’s what you want: stability. That means not buying high-yielders but instead the ones that survive multiple economic downturns and still come out strong.

That’s why today we’re going to look at an idea that remain essential, with long-term contracts and a management team that keep increasing dividends even during uncertainty. And even with that stability, it remains tied to one of the biggest growth demands of our time: artificial intelligence (AI). So, let’s get into it.

woman checks off all the boxes — Source: Getty Images

TA

TransAlta (TSX:TA) may not be the first dividend stock you think of when it comes to growth and income. Yet it’s one of the largest publicly traded power generators with operations across Canada, the United States, and Australia. What’s more, those operations are diverse, including hydro, wind, solar, natural gas, and battery storage.

In the last year, TA stock has been focusing on a transition, away from coal for a cleaner, more flexible fleet. This included a memorandum of understanding tied to Alberta data-centre development alongside Brookfield and CPP Investments. That’s huge, as hyper-scale data centres need a massive amount of electricity, and Alberta’s power market could end up tightening significantly.

TA stock also secured more long-term growth through a tolling agreement to convert Centralia Unit 2 to natural gas. It also completed its Far North acquisition in 2026 for about $95 million, adding 310 megawatts (MW) of gas-fired capacity in Ontario.

Into earnings

Alright, with all this growth, is TA stock able to fund it? In short: yes. During its fourth quarter and full-year 2025 results, revenue came in around $2.41 billion for 2025. Guidance for 2026 also called for adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) between $950 million and $1.05 billion. That’s a darn good outlook.

Then there was the recent quarter. Q1 2026 cash flow from operations (FFO) rose to $123 million, with operational availability remaining at a stellar 93.8%. What’s more, TA stock also increased its dividend by another 8%, bringing it to $0.28 annually, and yielding about 1.6% at writing, TA stock’s seventh consecutive increase.

Yet here’s the thing: analysts see more upside to come. The stock offers a $5.23 billion market cap, with shares up 48% in the last year, but those shares are down from 52-week highs. So, while that yield might look on the low side, remember: we’re thinking long term.

Looking ahead

The long term looks strong for TA stock. Electricity demand could become the real long-term story. AI infrastructure, electrification, and industrial growth all require huge amounts of reliable power. Alberta’s power market may benefit from tightening supply and rising demand over time. All this leaves TA stock in a solid position as it already owns infrastructure that could become increasingly valuable in that environment.

Furthermore, TA stock expects Alberta fundamentals to improve materially as data-centre load growth arrives. And no matter what kind of energy source it chooses, TA stock will be there with that mix of hydro, renewable and more, so there is a reduction in reliance on any one source.

Now, of course, TA stock is not risk-free. Alberta power prices can remain volatile, utilities and power producers remain capital-intensive businesses, and renewable buildouts and regulatory changes can pressure returns. Yet again, we’re thinking long term, and those long-term contracts mean long-term cash flow.

Bottom line

Lifetime dividend stocks don’t have to have these massive yields. In fact, that can be a huge red flag. Instead, investors should watch for growing cash flow and increasing payouts over time. In that case, TA stock is a huge winner that could bring in ample income even with $15,000 at writing.