The Only Stock I’d Hold in a TFSA for Life

Investors seeking long-term capital appreciation and growing dividend income within a TFSA could consider investing in this TSX stock.

Key Points
  • Brookfield Infrastructure Partners is a solid buy-and-hold TFSA stock, thanks to its portfolio of essential infrastructure assets that generate stable, inflation-protected cash flows.
  • The company has delivered strong long-term growth, with FFO growing at a 14% CAGR since 2009 and first-quarter FFO per unit rising 10% year over year, led by its data and midstream businesses.
  • TFSA investors will continue to benefit from capital appreciation and growing dividend income.

What if you could buy only one Canadian stock, tuck it away in your Tax-Free Savings Account (TFSA), and hold it for the rest of your investing life?

While most investors constantly chase the next hot opportunity, long-term wealth is often built by owning solid businesses and giving them years to compound. And when those gains grow inside a TFSA, every dollar stays tax-free. This tax efficiency significantly enhances returns in the long run.

Against this background, here is a fundamentally strong stock to buy and hold for life.

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A top stock to hold in a TFSA for life

If you’re looking for a TSX stock that can help build long-term wealth while generating growing passive income, Brookfield Infrastructure Partners (TSX: BIP.UN) deserves a spot on your radar.

Brookfield Infrastructure operates a diversified portfolio of essential infrastructure assets. The company owns and operates high-quality utilities, transportation networks, midstream energy assets, and critical infrastructure for data transmission and storage.

These essential assets generate stable, predictable cash flows, supported by long-term contracts and regulatory frameworks. As a result, Brookfield Infrastructure generates sustainable, growing funds from operations (FFO), which supports its share price and distributions.

The strength of its portfolio has translated into impressive long-term returns. Between 2009 and 2025, Brookfield Infrastructure’s FFO has grown at a compound annual growth rate (CAGR) of 14%. Moreover, most of its cash flow is either protected from inflation or indexed to it, providing a hedge against rising prices.

Overall, Brookfield Infrastructure’s business model is highly defensive. Roughly 85% of FFO comes from regulated or contracted assets, reducing earnings volatility and helping the company navigate economic uncertainty.

For income investors, Brookfield Infrastructure’s track record is equally compelling. The company has increased its distribution for 17 consecutive years and targets a sustainable payout ratio of 60% to 70% of FFO. Management also expects annual distribution growth of 5% to 9% in the years ahead, offering TFSA investors a combination of tax-free income and long-term capital appreciation.

Brookfield Infrastructure delivers strong Q1 results

Brookfield Infrastructure carried its strong momentum into the first quarter, reporting FFO per unit growth of 10% year over year. The first quarter’s FFO growth was driven by robust performance across its core businesses, with significant contributions from the data and midstream segments, where FFO climbed 46% and 12%, respectively.

The company’s utilities and transport operations also delivered resilient results, reflecting the strength and stability of Brookfield’s diversified infrastructure portfolio. In addition, earnings benefited from increased capital recycling activity completed throughout 2025, helping further enhance overall performance.

The bottom line

Brookfield Infrastructure appears well-positioned to continue delivering reliable growth, supported by the expanding contribution of its high-growth data infrastructure business and the resilience of its utility and transport operations.

The company’s data segment is benefiting from multiple growth drivers, including increased contributions from its recent acquisition of a U.S. bulk fibre network and continued organic expansion across its data storage platform. Over the past year, Brookfield commissioned more than 200 MW of operating data centre capacity, providing an additional boost to earnings. Meanwhile, its utility segment should benefit from the addition of recently commissioned capital to the rate base, supporting stable, predictable returns.

Importantly, Brookfield’s capital recycling strategy and strong balance sheet provide significant financial flexibility. With several asset sales underway and continued access to capital markets, the company remains well-equipped to fund its investment pipeline without stretching its finances.

For TFSA investors, Brookfield Infrastructure remains an attractive option for long-term capital appreciation and growing dividend income.

Fool contributor Sneha Nahata has no position in any of the stocks mentioned. The Motley Fool recommends Brookfield Infrastructure Partners. The Motley Fool has a disclosure policy.

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