This Is the 1 Stock I’d Never Sell in My TFSA

This solid stock can be a buy-and-hold investment in the TFSA, especially when bought on market-wide pullbacks.

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Key Points
  • Recommendation: Brookfield Infrastructure Partners (TSX:BIP.UN) is the one stock the author would never sell in a TFSA, chosen for its ability to compound returns tax-free over decades.
  • Durable cash flows & growth: ~85% of FFO comes from regulated/long-term contracted revenues, YTD FFOPU rose 9.8% (to US$1.79) with ~7–8% organic growth, and management’s capital-recycling plus data-centre/fibre exposure provide further expansion (including AI-related demand).
  • Dividend strength: ~18 years of annual distribution increases (10-/15‑yr CAGRs 7.3%/9.5%), current yield ~4.7%, payout ratio ~65% and a 5–9% long-term distribution-growth target, making it well-suited for a buy-and-hold TFSA.

If I could own just one stock in my Tax-Free Savings Account (TFSA) for the next 20 years, it would be Brookfield Infrastructure Partners L.P. (TSX: BIP.UN).

That’s saying a lot, considering how many quality Canadian dividend stocks are available. Yet Brookfield Infrastructure checks nearly every box I look for in a forever investment: dependable cash flows, durable competitive advantages, steady distribution increases, and multiple avenues for long-term growth. Better yet, all of those returns can compound tax-free inside a TFSA.

Some investors avoid the stock because it’s more volatile than the average regulated utility. I actually welcome that volatility. As long as the company’s fundamentals remain intact, market pullbacks simply give long-term investors the chance to buy more shares at better prices.

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A business built to thrive for decades

Brookfield Infrastructure owns a globally diversified portfolio of essential infrastructure assets across utilities, transportation, midstream energy, and data infrastructure. These are high-quality, long-life assets. They’re critical assets that generate recurring cash flows through all stages of the economic cycle. In fact, about 85% of its funds from operations (FFO) are supported by regulated or long-term contracted revenues. 

The company’s latest results show that the strategy continues to work. In the second quarter, reported on July 30, year-to-date funds from operations per unit (FFOPU) climbed 9.8% to US$1.79. That growth was supported by organic expansion of roughly 7% to 8% and the company’s inflation-linked contracts, which help protect cash flows when prices rise.

Management continues to execute its proven capital-recycling strategy. During the first half of 2026, Brookfield Infrastructure invested more than US$800 million in new opportunities, including Clarus, a leading gas infrastructure utility in New Zealand, while generating nearly US$1.2 billion from asset sales. Selling mature assets and reinvesting in higher-return opportunities has been a key driver of the company’s long-term success.

Meanwhile, Brookfield Infrastructure is becoming an increasingly attractive way to benefit from artificial intelligence (AI). Rather than betting on expensive AI software companies, investors gain exposure through the infrastructure that powers the digital economy, including data centres, fibre networks, and other mission-critical assets.

Investors dream about this kind of dividend

One of the biggest reasons I’d never sell this stock is its remarkable distribution growth record. Since being spun off from Brookfield roughly 18 years ago, the company has increased its cash distribution every year.

Its 10-year and 15-year annualized distribution growth rates of 7.3% and 9.5%, respectively, are outstanding for a utility. Investors who bought years ago could easily be earning a yield on cost above 10%, and that income should continue growing if management delivers on its long-term target of raising the distribution by 5% to 9% annually.

Importantly, those increases appear well supported. Brookfield Infrastructure’s year-to-date payout ratio sits at a healthy 65%, comfortably within its long-term target range of 60% to 70%, leaving room for future distribution hikes as FFO continues to grow.

The bottom line

A great TFSA stock is one you can buy, hold, and allow to compound for years without constantly worrying about the next quarter. Brookfield Infrastructure fits that description perfectly. It combines resilient cash flows, inflation protection, disciplined capital allocation, AI-driven growth opportunities, and a management team with an exceptional long-term track record.

With a distribution yield of about 4.7% and a reasonable valuation, Brookfield Infrastructure still looks like a good buy for patient investors. Whether you start a position today or add more during the next market pullback, this is one high-quality stock I’d be happy to own — and never sell — in my TFSA.

Fool contributor Kay Ng has positions in Brookfield Infrastructure Partners. The Motley Fool has positions in and recommends Brookfield Corporation. The Motley Fool recommends Brookfield Infrastructure Partners. The Motley Fool has a disclosure policy.

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