The Only Stock I’d Hold in a TFSA for Life

When it comes to investing in a Tax-Free Savings Account (TFSA), especially as someone new to investing, keeping your self-directed portfolio as simple as possible can be a big advantage. This year has seen markets worldwide become incredibly volatile, amid the US-Iran war and the possibility of an end to the already fragile ceasefire looming overhead.

The market volatility and rotations keep changing by the hour, and rebalancing your portfolio each week, only to see another development making it necessary to do so again, is a big hassle. Seasoned investors know that the best way to use a TFSA is to allocate contribution room to investments that compound and deliver substantial long-term returns.

High-quality blue-chip stocks can make all the difference for a TFSA investor with a long investment horizon. A good long-term holding can offer returns through capital gains and shareholder dividends. These stocks also offer the stability that a self-directed portfolio can anchor itself to, enabling sustainable wealth growth.

Fortunately, there is no shortage of dividend stocks that can help you start building a solid TFSA portfolio. One of the best picks to set as the foundation could be Canadian Natural Resources Ltd. (TSX:CNQ).

Canada’s largest energy stock

CNRL is a well-known name among seasoned investors. The $137.8 billion market capitalization firm headquartered in Calgary is one of Canada’s largest energy producers. It boasts a diversified portfolio of assets that includes conventional crude operations alongside natural gas and oil sands. This provides CNQ stock with several revenue streams and the kind of operational flexibility that lets it generate strong cash flows, even when commodity prices are volatile.

CNQ has been a staple in many investment portfolios due to its consistency in providing returns to its investors over the decades. The company actively prioritizes sending cash back to shareholders through regular quarterly dividend distributions. Its defensive business model and integrated approach to the industry give it the ability to comfortably fund its payouts.

Canadian Natural’s portfolio of energy assets primarily consists of long-life and low-decline assets. This helps the company maintain stable production levels, which aids in its growth.

Foolish takeaway

Stable long-term growth and the ability to pay dividends make it an attractive investment. For TFSA investors, a stock that can provide regular distributions in the long run can be an excellent investment. They can reinvest the dividends to unlock the power of compounding and accelerate wealth growth. Eventually, the portfolio’s returns through dividends alone can be sizable enough to help you fund your expenses through tax-free withdrawals.

As of this writing, CNQ stock trades for $66.08 per share, and it pays its investors $0.625 per share each quarter, translating to a 3.8% dividend yield. It might not be a stock offering the highest dividend yield, but it is stable, and it keeps growing.

Backed by strong free cash flow generation, it has increased its payouts for the last 10 consecutive years. CNQ stock also looks well-positioned to continue increasing payouts for years to come. For someone seeking a buy-and-forget investment, CNQ stock can be a compelling pick to consider.

The post The Only Stock I’d Hold in a TFSA for Life appeared first on The Motley Fool Canada.

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More reading

• Top Canadian Stocks to Buy With $5,000 in 2026
• Canadian Natural Resources vs. Enbridge: Which Dividend Stock Looks Better Today?
• All-Weather TSX Stocks for Every Market Climate
• The Canadian Energy Stock I’m Buying Now: It’s a Steal
• Top Canadian Stocks to Buy With $20,000 in 2026

Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends Canadian Natural Resources. The Motley Fool has a disclosure policy.