Retire Richer: 2 Canadian Stocks for a TFSA Built to Last

Reinforce your self-directed TFSA portfolio with these two Canadian stocks that can generate cash flow and pay attractive dividends.

Key Points
  • Market volatility makes defensive, cash‑generating stocks attractive TFSA holdings for long‑term, tax‑free income.
  • Consider BCE (TSX:BCE) — a telecom giant trading near $29.69 with predictable recurring revenue and a quarterly dividend of $0.4375 (≈5.89% yield).
  • Also consider Freehold Royalties (TSX:FRU) — a lower‑risk energy royalty play paying $0.09/month (≈6.84% yield), offering energy exposure with steady cash flow for a TFSA.

Stock market volatility is something every investor faces at any given time, due to circumstances beyond their control. Whether the volatility happens due to rising inflation rates, changing interest rates (or even news related to it), global conflicts, or the fears of a slowing economy, market volatility can seem intimidating. For seasoned investors, these periods are an opportunity to think about long-term investment decisions.

There is no way to tell when and how market volatility starts, or how long it can last. However, stock market investors can control the type of businesses and industries they invest in for their self-directed Tax-Free Savings Account (TFSA) portfolios.

One of the best ways to build a TFSA with a long-term perspective is to focus on companies with defensive businesses, reliable cash flows, and solid fundamentals that can sustain the return of capital to shareholders for decades.

These are the types of companies that investors focus on when markets become more volatile because the underlying businesses have the flexibility to invest in growth, maintain payouts, and execute long-term strategies despite short-term challenges. Today, I will discuss two TSX stocks that can help you retire richer if you buy and hold in a TFSA for decades.

a man relaxes with his feet on a pile of books

Source: Getty Images

BCE

BCE Inc. (TSX: BCE) is a $27.7 billion market-cap giant in the Canadian telecom sector. It is one of the Big Three Telcos in Canada, enjoying a wide share of the market, operating through subsidiaries that serve millions of Canadians daily, creating highly predictable and recurring revenue for the company. Regardless of the state of the economy, customers pay for internet and other communications services, giving BCE stock valuable defensive qualities.

Predictable revenue translates into strong cash flow for the underlying business, enabling the stock to continue its network expansion while returning significant capital to investors through quarterly dividends. As of this writing, BCE stock trades for $29.69 per share and pays investors $0.44 per share each quarter, translating to a 5.9% annualized dividend yield that you can lock into your self-directed TFSA today.

Freehold Royalties

Freehold Royalties Ltd. (TSX: FRU) is a $2.6 billion market-cap stock in the oil and gas industry. Energy stocks can often be some of the most volatile investments to hold in the stock market, but FRU stock provides an atypical asset for stock market investors interested in the industry. The stock offers exposure to the energy industry, but with a relatively lower degree of risk to investor capital.

FRU is not in the business of investing billions in drilling wells and production operations. Instead, the company owns royalty interests on land producing energy commodities. Freehold lets other companies develop those properties and handle the operating costs that come with it. In return, Freehold generates revenue through royalties, generating significant free cash flow without many of the risks involved in the industry.

It is an attractive business model that lets FRU stock pay its investors $0.09 per share each month, translating to a juicy 6.8% dividend yield that you can lock into a self-directed TFSA portfolio.

Foolish takeaway

No matter how defensive it is, no stock is completely immune to the impact of market downturns. However, resilient businesses tend to hold up better than the more speculative names in the market when the economic environment is harsh. Therefore, if you are looking for reliable long-term holdings for a TFSA, BCE stock and FRU stock can be some of the best investments to consider.

Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends Freehold Royalties. The Motley Fool has a disclosure policy.

More on Dividend Stocks

Trans Alaska Pipeline with Autumn Colors
Dividend Stocks

1 Top Canadian Dividend Stock Down 17% to Consider Now for Lifelong Income

This company has increased the dividend annually for more than three decades.

Read more »

Senior uses a laptop computer
Dividend Stocks

A 4.9% Dividend Stock I Plan to Hold Long Term: What $5,000 Would Collect

This is a solid utility stock to consider on dips for a long-term portfolio with a focus on growing income.

Read more »

shopper carries paper bags with purchases
Dividend Stocks

Your GIC Pays 3% to 4%: This TSX Stock Pays You Every Month Instead

SmartCentres pays more income than an illustrative GIC, but a modest unit-price decline could erase the first-year advantage.

Read more »

the word REIT is an acronym for real estate investment trust
Dividend Stocks

REIT Investing: I’m holding SmartCentres for its 98.1% Occupancy

SmartCentres’ fundamentals remain solid. Besides high occupancy, rental growth and a high-quality tenant base are positives.

Read more »

ETFs can contain investments such as stocks
Dividend Stocks

How to Structure a TFSA With $14,000 for Lifelong Monthly Income

Your $14,000 TFSA can seed tax free monthly income for life. See how to begin a low-cost passive income stream…

Read more »

holding coins in hand for the future
Dividend Stocks

Turning 65 in 2027? Delaying CPP Could Pay You 42% More a Year

Waiting until 70 can increase CPP substantially, but the five-year funding gap deserves as much attention as the bigger cheque.

Read more »

Blocks conceptualizing Canada's Tax Free Savings Account
Dividend Stocks

What the Telus Dividend Cut Means for Your TFSA Income, and What to Do About It

Telus’s steep dividend cut has reduced TFSA income, but its debt-reduction strategy and growth efforts could make the stock worth…

Read more »

Investor wonders if it's safe to buy stocks now
Dividend Stocks

TC Energy: Buy, Sell, or Hold in Late 2026?

A favourable demand environment and strong growth pipeline position TC Energy to deliver solid growth through late 2026 and beyond.

Read more »