Take Full Advantage of Your TFSA With These Dividend Stars

Retirees and other dividend investors are searching for top Canadian stocks to add to their self-directed Tax-Free Savings Account (TFSA) and Registered Retirement Savings Plan (RRSP) portfolios focused on generating passive income and long-term capital gains.

TFSA limit 2026

The TFSA limit is $7,000 in 2026. This brings the cumulative maximum contribution room to $109,000 for anyone who has qualified every year.

All interest, dividends, and capital gains earned inside the TFSA can be removed as tax-free income or fully reinvested. This is particularly helpful for retirees who collect Old Age Security (OAS), as the earnings taken from the TFSA do not count towards the annual net world income calculation the CRA uses to determine the OAS pension recovery tax. Every dollar of income earned above a minimum threshold triggers a $0.15 OAS clawback on the OAS paid in the following payment period. The number to watch in the 2026 income year is $95,323.

In the current market conditions, with stocks trading near record levels, it makes sense to consider companies that have long track records of delivering annual dividend growth.

Enbridge

Enbridge (TSX:ENB) recently reported strong 2025 results. The energy infrastructure and utilities giant delivered a 9% increase in full-year adjusted earnings. Distributable cash flow (DCF) increased 4% to $12.5 billion.

Enbridge continues to add new projects to its development program. The current secured project backlog is $39 billion, including natural gas pipeline and storage expansion, renewable energy installations, and energy export assets.

Enbridge expects adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), adjusted earnings per share (EPS), and DCF to grow by about 5% annually starting next year. As new assets are completed and go into service, the increased cash flow should support ongoing dividend hikes. Enbridge raised the dividend in each of the past 31 years. Investors who buy ENB stock at the current level can get a dividend yield of 5.5%.

Fortis

Fortis (TSX:FTS) is another dividend star that just reported robust 2025 financial results. Adjusted net earnings rose to $1.714 billion from $1.606 billion. Fortis is working on a $28.8 billion capital program that is expected to raise the rate base from $42.4 billion in 2025 to $57.9 billion in 2030. The resulting boost to cash flow should support planned annual dividend increases of 4% to 6%. Fortis raised the payout in each of the past 52 years.

Fortis has other projects under consideration that could extend the growth guidance, including the expansion of the electric transmission grid in the United States, where rising power demand is expected to drive significant infrastructure investment.

In Canada, the government’s plan to build a nationwide grid could also lead to more projects. Fortis has expertise in the power sector.

Fortis provides a 3.3% dividend yield at the time of writing. This is lower than what is available from other stocks, but the long-term total returns should offset the smaller initial yield.

The bottom line

Enbridge and Fortis pay attractive dividends that should continue to grow. If you have some cash to put to work in a TFSA focused on passive income, these stocks deserve to be on your radar.

The post Take Full Advantage of Your TFSA With These Dividend Stars appeared first on The Motley Fool Canada.

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More reading

• 2 High-Yield Dividend Stocks You Can Buy and Hold for a Decade
• Canadian Defensive Stocks to Buy Now for Stability
• How Much a Typical 45-Year-Old Has in TFSA and RRSP accounts
• Top Canadian Stocks to Buy Now for Long-Term Growth
• The Top 3 Dividend Stocks I’d Tell Anyone to Buy

The Motley Fool recommends Enbridge and Fortis. The Motley Fool has a disclosure policy. Fool contributor Andrew Walker has no position in any stock mentioned.