Transform Your TFSA Into a Cash-Generating Machine With $10,000

Investing in high-quality dividend stocks can help your portfolio turn into a cash-generating machine over time. Moreover, when these income-generating stocks are held inside a Tax-Free Savings Account (TFSA), the benefits become even better because any returns you earn are completely tax-free

To generate worry-free income, TFSA investors should look for stocks with a history of paying reliable and sustainable dividends. These businesses generate stable cash flows and offer steady payouts. By holding these stocks and reinvesting dividends, investors can build a solid cash-generating portfolio over the long term while remaining protected from taxes within the TFSA.

Although maintaining a diversified portfolio will help reduce risk and generate stable returns, here I’ll focus on a Canadian stock that could turn a TFSA into a cash-generating machine.

A top cash-generating dividend stock

TFSA investors looking for a growing stream of passive income could consider Enbridge (TSX:ENB) for its reliable payouts, high yield, and ability to grow its dividends across all market conditions. Enbridge has paid dividends for more than seven decades. In addition, it has raised its dividend at a compound annual growth rate (CAGR) of 9% since 1995. This payout history reflects ENB’s ability to navigate multiple commodity cycles and economic downturns while rewarding its shareholders with higher dividends.

Enbridge benefits from its diversified revenue sources. This diversification helps reduce volatility and drives the company’s distributable cash flow (DCF). Enbridge’s earnings are relatively insulated from commodity price swings, and the majority of its EBITDA stems from regulated assets or long-term, take-or-pay contracts. This operating structure ensures steady cash flow and drives dividend distributions.

Also, most of Enbridge’s EBITDA is indexed to inflation, providing a built-in hedge against rising costs and supporting steady growth. At the same time, Enbridge operates one of the largest pipeline and energy infrastructure networks in North America, linking major supply regions to key demand centres. This extensive network leads to consistently high asset utilization and positions the company to benefit from long-term trends in energy demand, even during periods of market uncertainty.

In December 2025, the company announced a 3% increase to its quarterly dividend, bringing it to $0.97 per share, or $3.88 annually. At the current share price, that payout yields roughly 5.2%.

Overall, Enbridge is a dependable income stock that can turn your TFSA into a cash-generating machine.

Earn $520 per year in tax-free income

Enbridge’s extensive liquid pipeline network, solid gas distribution and storage business, expanding regulated utility operations, and a growing portfolio of low-carbon energy sources position it well to deliver solid growth.

Thanks to its diversified revenue sources and contracted cash flows, Enbridge’s management projects its earnings and DCF will increase at a mid-single-digit rate in the coming years, driving higher dividend payments. Further, Enbridge targets a payout ratio of roughly 60% to 70% of DCF, which is sustainable.

Enbridge is likely to benefit from the broader growth in global energy demand. Its exposure to emerging structural trends, including rising electricity demand driven by AI-powered data centres and energy transition opportunities, augur well for growth.

TFSA investors can buy 134 Enbridge shares with a $10,000 investment, based on the recent closing price of $74.28. At the current dividend rate, that investment would generate approximately $129.98 in tax-free passive income every quarter, or about $520 (519.92 to be precise) per year.

CompanyRecent PriceNumber of SharesDividendTotal PayoutFrequencyEnbridge$74.28134$0.97$129.98QuarterlyPrice as of 14/03/2026

The post Transform Your TFSA Into a Cash-Generating Machine With $10,000 appeared first on The Motley Fool Canada.

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More reading

• TFSA: Invest $20,000 in These 4 Stocks and Get $1,100 in Passive Income
• 4 Secrets of TFSA Millionaires
• 2 Dividend Stocks to Lock In Now for Decades of Passive Income
• Should You Buy Enbridge Stock While It’s Below $75?
• Invest $30,000 in 3 TSX Stocks and Create $1,262 in Dividend Income

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