With the 2027 Tax-Free Savings Account (TFSA) contribution limit coming into focus, smart planners are already mapping out how to put every available dollar to work. For those looking for consistent, tax-free income, dividend-paying stocks could play a valuable role in a long-term TFSA strategy.
However, a high dividend yield alone should not determine an investment decision. Investors should assess a company’s dividend track record, earnings stability, cash flow generation, and financial strength to determine whether its distributions are sustainable across different economic and market cycles.
Against this background, here is a rock-solid, blue-chip name offering an attractive 5.9% dividend yield. Its solid distribution history, high yield, and reliable payout make it a top stock to consider for your TFSA.
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Enbridge: A 5.9% dividend stock for your 2027 TFSA contribution
TFSA investors looking for a reliable income stock could consider Enbridge (TSX: ENB). Its attractive 5.9% yield, solid record of dividend increases, visibility over future payouts, and solid growth prospects make it a compelling investment to plan your 2027 TFSA contributions around.
Enbridge operates across liquids pipelines, natural gas infrastructure, gas utilities, and renewable energy. This broad operating footprint allows Enbridge to capitalize on energy demand and support its earnings and distributable cash flow (DCF).
Thanks to its resilient business model and growing cash flow, Enbridge has paid dividends for more than seven decades and has increased its annual dividend for 31 consecutive years. Notably, a substantial portion of Enbridge’s adjusted EBITDA comes from regulated operations and long-term contractual arrangements, including take-or-pay agreements. This operating structure makes it relatively immune to commodity price fluctuations.
Looking ahead, Enbridge expects its adjusted EBITDA, DCF per share, and earnings per share (EPS) to grow by an average of approximately 5% annually over the medium term. Growing earnings and DCF per share provide room for further dividend increases.
Its dividend payout ratio also appears sustainable. Enbridge targets paying out approximately 60%–70% of its DCF in dividends, allowing it to reward shareholders while retaining funds for business expansion.
Enbridge to deliver solid dividend and growth
Enbridge is well-positioned to deliver steady earnings growth, supporting consistent dividend increases in the years ahead. The expansion of AI infrastructure, advanced manufacturing, and overall economic activity is creating greater demand for reliable energy transportation and distribution networks. With its extensive, diversified infrastructure footprint, Enbridge is well positioned to benefit from these trends.
Enbridge’s $38 billion secured capital backlog provides solid visibility into future growth opportunities. Alongside its annual investment capacity of approximately $10–11 billion, Enbridge has considerable flexibility to pursue new projects while continuing to execute its existing growth pipeline. Management remains focused on delivering its targeted 5% growth outlook, supported by investments in both existing and emerging energy infrastructure opportunities, as well as selective capital recycling to maintain balance sheet strength and investment discipline.
In addition to organic growth, Enbridge is expanding through strategic acquisitions in its Liquids Pipelines and Gas Distribution businesses. These acquisitions provide further opportunities to strengthen its existing operations, diversify earnings and generate incremental cash flows.
Enbridge’s dividend track record also remains an important part of its investment appeal. The company has returned approximately $39 billion to shareholders through dividends over the past five years and expects to distribute another $40–45 billion over the next five years. Its relatively predictable cash flows, supported by long-term infrastructure assets, provide a solid foundation for these distributions.
Overall, Enbridge is a compelling dividend stock to build your 2027 TFSA contributions around.
