2 Dividend Stocks to Lock-In Right Now for Long-Term Passive Income

These stocks are off their highs and pay attractive dividends.

Canadian retirees and other income investors are searching for good TSX dividend stocks to add to their self-directed Tax-Free Savings Account (TFSA) portfolio.

dividends grow over time

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Fortis

Fortis (TSX: FTS) raised its dividend in each of the past 52 years and intends to boost the payout by 4% to 6% annually through at least 2030. This reliability in the dividend growth is a big reason the stock price has trended higher for decades.

That being said, Fortis can still go through periods of weakness. The stock is actually down about 8% from the 2026 high above $80, giving back some of the big gains it racked up over the past two years after sliding from $64 to $50 over a six-month period in 2022. These pullbacks might be difficult for shareholders to watch, but they provide income investors with opportunities to buy dips and get a better yield.

Fortis is working on a $28.8 billion capital program that is expected to raise the rate base from about $42 billion to nearly $58 billion over five years. The revenue and profits generated from the new assets should support the planned dividend growth.

TC Energy

TC Energy (TSX: TRP) is another stock that currently trades at a nice discount to its 12-month high. The share price is down to $87 from $100 earlier this year. Investors who buy the dip can pick up a 4% dividend yield.

TC Energy found its groove again after running into some difficulties in 2022 and 2023 when soaring interest rates drove up borrowing costs just as the company had to take on extra debt to get its struggling Coastal GasLink pipeline completed. The 670 km pipeline came in at a cost of $14.5 billion compared to the original budget of below $7 billion. Management subsequently did a good job of shoring up the balance sheet by monetizing non-core assets and spinning off the oil pipelines division into a new firm.

Coastal GasLink went into commercial operation in late 2024 and now carries natural gas from Canadian producers to the new LNG Canada export facility on the coast of British Columbia. Timing is everything in the commodity markets. International demand for Canadian natural gas is soaring, and TC Energy is now planning phase two for Coastal GasLink that will double the pipeline’s capacity.

TC Energy had more success with its 715km Southeast Gateway pipeline in Mexico, which was completed in less than three years at a cost of just US$3.9 billion compared to the US$4.5 billion initial budget. It, too, is now in commercial operation.

TC Energy’s annual capital plan is chugging along at about $6 billion as the company expands its natural gas and power generation assets. The growth in cash flow driven by the new investments should enable the board to deliver steady dividend increases. TC Energy raised the dividend in each of the past 26 years.

The bottom line

Fortis and TC Energy trade at discounts to recent highs and provide attractive dividends that should continue to grow. If you have some cash to put to work in an income portfolio, these stocks deserve to be on your radar.

The Motley Fool recommends Fortis. The Motley Fool has a disclosure policy. Fool contributor Andrew Walker has no position in any stock mentioned.

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