Got $21,000? A Dividend Stock Worth Buying in a TFSA

A $21,000 investment in high-quality dividend stocks can be enough to create a reliable stream of passive income over time. Moreover, holding the top dividend stock inside a Tax-Free Savings Account (TFSA) can further enhance the income potential of your portfolio, as all dividends earned and capital gains generated within a TFSA are completely tax-free.

For income-focused investors, this combination of steady dividend payments and tax-free growth can become a powerful wealth-building strategy. By consistently holding strong dividend-paying companies in a TFSA, investors can gradually build a portfolio that will generate significant cash over time.

Against this background, here is a dividend stock worth buying in a TFSA. Based on its recent closing price and dividend yield, allocating $21,000 to this dividend stock could generate $1,036 in annual passive income.

A reliable TFSA dividend stock for long-term investors

Among the top dividend stocks on the TSX, TFSA investors could buy and hold Enbridge (TSX:ENB). This energy transportation company is one of the most reliable dividend growers.

Enbridge has distributed dividends for more than 70 years, consistently navigating downturns and economic changes without interrupting payouts. Notably, Enbridge has raised its annual dividend every year since 1995, reflecting the strength of its cash-generating operations.

Supporting ENB’s payouts are its high-quality assets, which generate predictable revenue. Nearly all of Enbridge’s earnings before interest, taxes, depreciation, and amortization (EBITDA) are backed by regulated frameworks or long-term take-or-pay contracts.

The company also benefits from inflation protection. Roughly 80% of its EBITDA is tied to inflation-adjusted arrangements, helping preserve earnings power and supporting future dividend growth even during periods of rising costs.

Enbridge owns one of North America’s largest energy infrastructure networks, including pipelines, natural gas utilities, and renewable assets. Its infrastructure connects key energy-producing regions to major demand markets, providing a competitive edge and supporting high asset utilization. As global energy demand grows, Enbridge is well-positioned to benefit from long-term infrastructure needs.

Currently, Enbridge pays a quarterly dividend of $0.97 per share, yielding more than 4.9% based on current market prices.

Earn $1,036 in annual dividend income

Enbridge’s diversified business, including liquids pipelines, natural gas utilities, storage, and renewable energy positions it well to capitalize on rising energy demand while adding stability. Management expects steady growth through 2026, with adjusted earnings and cash flow projected to rise as major projects come online and existing assets operate at higher capacity.

Moreover, a secured $39 billion capital backlog backed by long-term contracts further strengthens earnings visibility and will likely support higher dividend payments in the years ahead.

In addition, growing power demand from AI-driven data centres and expanding energy transition investments also support Enbridge’s long-term outlook.

Overall, Enbridge’s history of dependable dividend payments and resilient earnings, and management’s forecast of continued dividend growth at a mid-single-digit rate make it an attractive income stock for TFSA investors.

An investment of $21,000 in Enbridge shares could generate about $259 per quarter in tax-free income or $1,036 annually based on the current payout.