Canadian retirees are searching for good dividend stocks to add to a self-directed Tax-Free Savings Account (TFSA) focused on generating passive income.
Trade uncertainty and sticky inflation could start to put pressure on the TSX rally that has lasted nearly three years. With this in mind, it makes sense to consider stocks with dividends that should be safe, even if the economy hits a rough patch.
Fortis
Fortis (TSX:FTS) trades near $76 at the time of writing, compared to the 2026 high above $83. The pullback gives investors a chance to buy one of Canada’s best dividend-growth stocks on a decent dip.
Fortis owns and operates rate-regulated utility businesses that include power generation facilities, electricity transmission networks, and natural gas distribution utilities. These assets deliver predictable revenue that tends to be recession-resistant due to the essential nature of the products and services.
Fortis is working on a $28.8 billion capital program that is expected to boost the rate base from $42 billion to roughly $58 billion over five years. As the new assets are completed and begin to generate earnings, the boost to cash flow should enable Fortis to meet its goal of raising the dividend by 4% to 6% annually through 2030. Fortis increased the dividend in each of the past 52 years.
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Enbridge
Enbridge (TSX:ENB) spent US$14 billion in 2024 to buy three American natural gas distribution utilities. The deal turned Enbridge into the largest natural gas utility operator in North America and added strategic assets that complement the company’s extensive natural gas transmission network. Demand for natural gas is expected to rise in Canada and the United States as new gas-fired power generation facilities are built to provide electricity for AI data centres.
Enbridge has also expanded into energy exports just as international demand for Canadian and U.S. energy is increasing due to the wars in Ukraine and the Middle East. Enbridge purchased an oil export terminal in Texas and is a partner on the Woodfibre liquefied natural gas (LNG) export facility being built on the coast of British Columbia.
In total, Enbridge is working on $41 billion in secured capital projects that are expected to help drive annual growth in adjusted earnings and distributable cash flow of about 5%. That should support steady dividend increases. Enbridge raised the dividend in each of the past 31 years. Investors who buy ENB stock at the current price can pick up a 5.6% dividend yield.
BCE
BCE (TSX:BCE) is a contrarian pick today. The stock has been under pressure for the past three years, suffering from the impacts of high interest rates, lower immigration, and price wars in the communications industry. BCE cut its dividend by more than 55% last year in a move to preserve cash flow as it focuses on debt reduction and investing in new growth opportunities.
Investors seeking capital gains will need to be patient, but those looking for high-yield income might want to take a look at BCE now that most of the bad news should be in the rearview mirror. The reduced dividend payment should be safe and currently provides a dividend yield of 5.4%.
The bottom line
Fortis, Enbridge, and BCE should be attractive at current share prices. If you have some cash to put to work in a TFSA focused on dividend income, these stocks deserve to be on your radar.
