Dividend stocks can be powerful tools for long-term wealth creation, offering investors the potential for both capital appreciation and a steady stream of income. Reinvesting these payouts can further accelerate wealth creation through compounding. However, dividends are not guaranteed and ultimately depend on a company’s financial performance, cash flows, and management decisions.
Therefore, investors should focus on businesses with established operations, resilient cash flows, a strong history of dividend payments, and attractive long-term growth prospects. Holding these stocks in a Tax-Free Savings Account (TFSA) can also allow investors to earn eligible dividend income and capital gains tax-free. Against this backdrop, let’s explore three top dividend stocks that could be excellent additions to your TFSA.
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Enbridge
Enbridge (TSX: ENB) stands out as an attractive dividend stock for a TFSA because of its highly contracted business model, resilient cash flows, consistent dividend growth, and generous yield. The diversified energy infrastructure company generates about 98% of its earnings from regulated assets and long-term take-or-pay contracts, and about 80% of those earnings are inflation-indexed. This structure helps insulate its financial performance from economic cycles and commodity-price volatility. Backed by reliable cash flows, Enbridge has increased its dividend for 31 consecutive years and currently offers a forward yield of 5.73%.
The company also stands to benefit from growing demand for energy infrastructure as oil and natural gas production expands. Enbridge has identified approximately $50 billion in growth opportunities and plans to invest $10–$11 billion annually to fund these projects. Management expects earnings and cash flow to grow at an annualized rate of about 5% through the end of the decade. It also plans to return approximately $45 billion to shareholders over the next five years, supporting the stock’s appeal to long-term income-focused investors.
Bank of Nova Scotia
The second dividend stock that could be a solid addition to your TFSA is Bank of Nova Scotia (TSX: BNS), which provides a broad range of financial services across multiple markets. Its diversified operations and recurring revenue streams support relatively stable cash flows, enabling the bank to maintain a long history of shareholder distributions. Scotiabank has paid dividends since 1833 and has increased its payouts at an annualized rate of 4.5% over the past decade. The stock currently offers a forward yield of 3.41%.
Meanwhile, Scotiabank is repositioning its business toward its more profitable North American operations while reducing its exposure to less profitable Latin American markets. This strategy could improve the quality and consistency of its earnings over time. Its core lending business could also benefit from a favourable interest-rate environment, while ongoing share repurchases could further enhance per-share earnings and shareholder returns. With a strong dividend history, attractive income, and opportunities for earnings growth, Scotiabank could be a compelling long-term TFSA holding.
Fortis
My final pick is Fortis (TSX: FTS), which provides electricity and natural gas services to approximately 3.5 million customers across Canada, the United States, and the Caribbean. Most of its assets are regulated and concentrated in relatively low-risk transmission and distribution businesses, supporting stable and predictable financial performance across economic cycles. This resilience has helped Fortis increase its dividend for 52 consecutive years. With a quarterly dividend of $0.64 per share, the stock currently offers a forward yield of approximately 3.4%.
Fortis is also investing heavily to expand its regulated asset base. The utility plans to invest $28.8 billion over the next five years, which could grow its rate base at an annualized rate of about 7% to $57.9 billion. These investments should support earnings and cash-flow growth, while management expects to increase dividends by 4–6% annually through 2030. With its defensive business model, dependable cash flows, and long track record of dividend growth, Fortis could be a strong long-term TFSA holding.
