An Ideal TFSA Stock With a Steady 5.5% Yield

Investors who are looking for yield-generating opportunities to put into their Tax-Free Savings Accounts (TFSAs) in 2026 have a number of great Canadian dividend stocks to choose from. That said, some bond proxies in this group may be best served in other brokerage accounts or Registered Retirement Savings Plan, due to tax reasons.

Investors will want to hold long-term dividend stocks that can provide capital appreciation over time. That leads me to one top dividend stock with a 5.5% yield I think is worth holding in a growth-friendly account like a TFSA.

Let’s dive into one of my top picks for TFSA investors looking to put fresh capital to work in this account in Q1 2026.

Enbridge

If you’re hunting for a rock-solid stock to supercharge your TFSA in 2026, look no further than Enbridge (TSX:ENB). With its steady 5.5% yield and bulletproof fundamentals, this energy infrastructure giant delivers tax-free income you can count on for decades.

In fact, Enbridge just hiked its quarterly dividend by 3% to $0.97 per share. What that works out to is a $3.88 annualized dividend, or a yield of around 5.5% at the time of writing.

Impressively, this increase also marks the 31st straight year of increases. At current prices around $70 per share, Enbridge stock now yields about 5.5%, and in a TFSA, every cent grows tax-free. That can turn this holding into a compounding machine for retirement savers.

Financial strength, solid growth, and manageable debt

This past year was a banner 2025 for investors in Enbridge stock. The company’s full-year adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) hit $19.95 billion (up from $18.62 billion in 2024), and distributable cash flow (DCF) per share rose to $5.71. Indeed, Q4 alone saw DCF per share at $1.47, up from $1.41 year over year. This hit the top of management’s guidance for the 20th consecutive year. This cash flow engine (98% coming from long-term, inflation-indexed contracts) shields earnings from oil price swings and economic hiccups.

Additionally, Enbridge’s debt-to-EBITDA ratio sits around a healthy five times, supporting $50 billion in projects through 2028 (including $14 billion sanctioned in 2025 alone). I’m expecting 2026 EBITDA of $20.2-20.8 billion and DCF per share of $5.70-6.10, with 5% annual growth post-2026. Pipelines, renewables, and utilities fuel this, blending fossil fuels with green energy for future-proof returns.

Enbridge has delivered 12.1% average annual total returns over 20 years, outpacing markets. Trading at 2.5 times forward sales and around 23 times earnings, this is a reasonably valued stock given the robust energy growth I’m expecting to see over the coming decades. In short, I think Enbridge is a defensive gem with growth and dividend upside that should provide solid total returns over the long-haul. That’s the kind of stock I think investors want to own in their TFSAs right now.

The post An Ideal TFSA Stock With a Steady 5.5% Yield appeared first on The Motley Fool Canada.

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More reading

• 2 Stocks I’d Happily Hold Through Any Stock Market Crash
• How Government Infrastructure Plans Could Reshape Your Portfolio
• Enbridge Stock: Buy Now or Wait for More Downside?
• 3 Canadian Dividend Stocks for Passive Income That Keep Growing
• Should You Buy Enbridge While it’s Below $71?

Fool contributor Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool recommends Enbridge. The Motley Fool has a disclosure policy.