Canadian pensioners and other dividend investors are wondering which top TSX stocks are attractive to buy right now for a self-directed Tax-Free Savings Account (TFSA) portfolio focused on generating reliable passive income and long-term capital appreciation.
Source: Getty Images
Enbridge
Enbridge (TSX: ENB) increased its dividend in each of the past 31 years. The stock has pulled back from the 2026 high around $80 to the current price near $68 per share. Investors who buy the dip can pick up a dividend yield of 5.7%.
Dividend growth should continue, supported by cash flow gains from the $41 billion capital program and acquisitions. Enbridge intends to invest roughly $10 billion per year over the medium term on development projects across the broader portfolio of businesses that include oil and natural gas infrastructure, export facilities, and renewable energy installations. As the new assets are completed and go into service, the boost to adjusted earnings and distributable cash flow is expected to be about 5% annually.
On the acquisition front, Enbridge recently announced two strategic deals in the United States. The company is spending US$2.55 billion to buy oil pipelines, storage, and marketing operations in the American Rockies region. Enbridge is also buying oil infrastructure in Texas and New Mexico for US$600 million. These assets will enable more producers to connect directly with Enbridge’s oil export terminal in Texas that was purchased for US$3 billion in 2021.
Enbridge issued $3 billion in new shares to cover part of the cost of the latest acquisitions. The stock sale is a big reason the share price slipped $3 at one point last week. It has since recovered a good chunk of the drop, as bargain hunters moved in to take advantage of the dip.
Regarding risks, interest rate increases in the United States and Canada could be a headwind for the stock over the near term. Enbridge uses debt to fund part of its growth program, so higher borrowing costs could put pressure on profits.
Fortis
Fortis (TSX: FTS) has given its investors a dividend increase for 52 consecutive years. The board intends to continue raising the distribution by 4% to 6% annually through at least 2030, supported by the $28.8 billion capital program.
Fortis operates $79 billion in utility assets in Canada, the United States, and the Cayman Islands. The businesses include power generation facilities, natural gas and electric utilities, and electricity transmission networks. Revenue is primarily rate-regulated, which means cash flow should be predictable and reliable.
Fortis also has a track record of making strategic acquisitions to diversify the asset portfolio. The company hasn’t done a large deal for some time, but consolidation in the power and utility sectors is likely in the coming years as demand for electricity and natural gas is expected to rise.
Fortis trades near $76 per share at the time of writing compared to the 12-month high around $83.
The bottom line
Enbridge and Fortis pay good 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 today.
