Retirees and other dividend investors are finally getting a chance to buy some top TSX stocks at discounted prices for a self-directed Tax-Free Savings Account (TFSA) portfolio focused on generating steady tax-free passive income.
Source: Getty Images
Enbridge share price
Enbridge (TSX: ENB) trades near $69 per share at the time of writing compared to the 12-month high north of $80. The pullback has pushed the dividend yield back up to 5.6%, providing income investors with a solid return that is well above the current 3% inflation rate in Canada.
Enbridge raised the dividend in each of the past 31 years. Additional ongoing annual increases should be on the way as the company grows adjusted earnings and distributable cash flow through a combination of development projects and acquisitions.
Enbridge has already sanctioned $9 billion in growth projects in 2026 and continues to work on its large secured capital program of $41 billion as of the Q2 2026 earnings report at the end of July. Enbridge has since announced a $2.7 billion expansion of its Westcoast natural gas pipeline system in British Columbia. The company also recently said it will buy oil infrastructure assets in the Permian Basin region of Texas and New Mexico for US$600 million. This strategic acquisition will provide U.S. producers with direct access to Enbridge’s oil export terminal in Texas. Enbridge purchased the export site for US$3 billion in 2021.
Expansion in the United States has been a core strategic focus for Enbridge in recent years as it moves to diversify its asset base and revenue streams. Enbridge purchased three American natural gas utilities for US$14 billion in 2024. The deal made Enbridge the largest natural gas utility operator in North America. These new assets, along with the existing natural gas transmission infrastructure the company owns in the United States, will enable Enbridge to benefit from the rising demand for natural gas as new gas-fired power generation facilities are constructed to provide electricity to AI data centres. At the same time, Enbridge’s renewable energy group is building solar and wind projects for tech firms in the United States, as part of the power supply mix.
Canada’s plan to become an energy superpower could pave the way for new major oil infrastructure in the home country as the government moves to reduce reliance on the United States for energy sales. Enbridge’s expertise in the sector would make it a good candidate to participate.
Risks
Enbridge’s share price fell from $59 in 2022 to $44 in late 2023 when the U.S. Federal Reserve and the Bank of Canada aggressively raised interest rates to get inflation under control. Enbridge uses debt to fund part of its capital program and acquisitions. Higher borrowing expenses can cut into profits, reduce cash for dividends and debt repayment, and potentially delay projects.
Rising yields on government bonds and sticky inflation could force the central banks to start raising interest rates again in the next year. This would potentially be a new headwind for Enbridge’s share price.
Enbridge is also under pressure from the governor of Michigan, who wants to shut down Enbridge’s Line 5 pipeline. A section of the pipeline runs along the bottom of the Straits of Mackinac that connects Lake Michigan and Lake Huron.
The bottom line
Near-term turbulence should be expected, but the current dividend yield pays investors well to ride out any additional downside, and the capital program should support ongoing dividend growth. If you have some cash to put to work in a buy-and-hold income portfolio, this stock deserves to be on your radar.
