Retirees and other dividend investors are searching for good Canadian stocks to add to their self-directed Tax-Free Savings Account (TFSA) portfolios focused on generating tax-free passive income.
The decline in the share prices of some industry leaders in recent months has pushed yields to attractive levels.
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BCE
BCE (TSX: BCE) is a contrarian pick in the current market conditions. The stock trades near $28 per share at the time of writing, compared to $36 earlier this year. It was as high as $73 going back to 2022.
The company slashed the dividend by more than 50% in 2025 to preserve cash flow in an effort to reduce debt and fund capital programs in a challenging environment that is still present.
High interest rates continue to put pressure on the company, due to its elevated debt position. At the same time, a drop in immigration to Canada and industry price wars have been headwinds for revenue and profits in the core mobile and internet subscription businesses. These challenges will likely remain in place for some time, but most of the negative outlook should be largely reflected in the share price at this level.
On the upside, BCE’s American internet services provider, Ziply Fiber, offers good growth potential south of the border. At home, BCE is building AI data centres to meet demand from government and corporate clients that are searching for solutions to keep their data secure on Canadian soil.
The reduced dividend should be sustainable, even in a difficult market. Investors who buy BCE at the current level can get a dividend yield of 6.3%.
Enbridge
Enbridge (TSX: ENB) is an energy infrastructure giant that moves roughly 30% of the oil produced in Canada and the United States and 20% of the natural gas used by American homes and businesses. The company has been aggressive with its growth program in recent years, making strategic acquisitions and building out new infrastructure across the asset portfolio.
Enbridge added export facilities and natural gas utilities in the United States to diversify the revenue stream. Deals announced in the past few weeks, however, have focused on U.S. oil gathering, transmission, and marketing operations that will complement the American oil portfolio. At home, Enbridge owns a stake in the Woodfibre liquefied natural gas (LNG) export facility that is nearing completion on the coast of British Columbia.
Regarding development programs, the capital plan now sits at $41 billion. As the new assets are completed and go into service, the boost to cash flow should support dividend increases.
Demand for Canadian and American energy is on the rise. Global buyers are seeking out reliable supplies of oil and natural gas amid major disruptions caused by wars in Ukraine and the Middle East. In the domestic markets, new gas-fired power generation facilities are being built to supply electricity for AI data centres. Enbridge’s extensive oil and gas infrastructure and export facilities put it in a good position to benefit from higher volumes.
Enbridge trades near $67 per share at the time of writing, compared to $80 a few months ago. Investors can now get a 5.8% yield from the stock.
The bottom line
BCE and Enbridge are industry leaders paying dividends with attractive yields. If you have some cash to put to work in a portfolio focused on passive income, these stocks deserve to be on your radar.
