Canadian retirees and other income investors are searching for good stocks to add to their self-directed Tax-Free Savings Account (TFSA) portfolios focused on dividend income and long-term total returns.
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Fortis
Fortis (TSX: FTS) recently hit a new record high. The stock is up 10% in the past month and has gained more than 50% over the past five years.
Fortis owns and operates utilities in Canada, the United States, and the Caribbean. The businesses include electric and natural gas distribution utilities, power generation facilities, and electricity transmission grids. Revenue is largely rate-regulated and tends to be predictable due to the essential nature of the services. This enables management to plan long-term capital projects to drive steady growth.
Fortis recently updated its five-year capital program. The company plans to invest $32.2 billion through 2031 on a variety of projects across the asset base, primarily in the United States and Canada. As the new assets are completed and go into service, the boost to cash flow should support planned annual dividend increases of 4% to 6% over the next five years. Fortis has given investors a dividend increase for 53 consecutive years, so the guidance should be solid.
Enbridge
Enbridge (TSX: ENB) is another major operator in the natural gas utility industry. In fact, the company’s US$14 billion purchase of three American natural gas utilities in 2024 turned Enbridge into the largest player in the sector in North America. These assets complement the extensive natural gas storage and transmission assets Enbridge operates in Canada and the United States, positioning the firm to benefit from the anticipated surge in natural gas demand in the coming years as new gas-fired power generation sites are built to supply power to AI data centres.
On the oil side, Enbridge continues to expand its footprint as it links more producers to its infrastructure network that already carries 30% of the oil produced in the U.S. and Canada. Enbridge also owns an oil export terminal in Texas that is seeing strong demand as international buyers ramp up purchases of North American oil to replace supplies disrupted by the closure of the Strait of Hormuz and sanctions placed on Russia.
Enbridge has the financial clout needed to make strategic acquisitions while pursuing a large capital program. In fact, the company recently announced more than US$3 billion in oil infrastructure deals and is currently working on a $38 billion secured capital plan. Revenue and cash flow from the new assets should support ongoing dividend growth. Enbridge has increased the dividend annually for more than three decades.
ENB trades near $68 per share at the time of writing. This is down from the 2026 high around $80. Investors who missed the big rally over the past two years can use the pullback to pick up the stock at a discounted price and start collecting a 5.7% dividend yield.
The bottom line
Fortis and Enbridge pay good dividends that should continue to grow. If you have some cash to put to work in a self-directed TFSA focused on dividends and long-term capital upside, these stocks deserve to be on your radar.
