A Recession-Resistant Dividend Stock for Lifelong TFSA Income

Recession-resistant dividend stocks are perhaps the most powerful inside a Tax-Free Savings Account (TFSA). These dividend stocks combine two things investors crave during uncertain times: reliable income and peace of mind. These are businesses tied to essentials like insurance, wealth management, utilities, and financial services that people rely on regardless of economic conditions.

When markets wobble, the companies tend to keep generating cash and paying dividends, allowing TFSA investors to collect tax-free income without having to sell assets at the wrong time. Over decades, that consistency can quietly turn a TFSA into a lifelong income engine. So, let’s check out one to consider on the TSX today.

POW

Power Corporation of Canada (TSX:POW) is a diversified financial holding company with deep roots in Canada and Europe. Through its controlling stakes in Great-West Lifeco, IGM Financial, and other investment platforms, POW sits at the centre of insurance, asset management, and retirement savings. This structure gives it exposure to millions of policyholders and investors whose financial needs don’t disappear in recessions. Over the long term, POW’s share price performance has been steady rather than flashy, reflecting its role as a compounding dividend stock rather than a growth story driven by hype.

In recent years, POW’s performance has benefited from rising interest rates, which generally support insurance profitability and investment income. While market volatility has weighed on asset management valuations at times, the dividend stock’s diversified structure helped smooth out those swings. Insurance earnings, fee-based revenue, and disciplined capital allocation have kept the business resilient. For income investors, POW’s ability to absorb short-term market stress without jeopardizing its dividend has been a key part of its appeal.

Into earnings

On the earnings front, POW continued to deliver stable, predictable results driven primarily by Great-West Lifeco. Insurance operations have produced consistent earnings supported by higher interest rates and strong capital positions, while IGM Financial has navigated softer markets with cost discipline and steady client assets. Overall earnings have remained resilient, reflecting the defensive nature of POW’s underlying businesses. Importantly for dividend investors, cash flow at the holding company level has comfortably supported the payout.

From a valuation standpoint, POW often trades at a discount to the value of its underlying holdings, a common trait among diversified holding companies. That discount can frustrate short-term traders, but it tends to favour long-term income investors who prioritize dividends over rapid multiple expansion. The dividend yield has remained attractive, and management has shown a clear commitment to returning capital to shareholders while maintaining a conservative balance sheet.

Considerations

POW stands out as a recession-resistant dividend stock because its core earnings come from insurance premiums, retirement savings, and long-term investments. These are areas that remain relevant through every economic cycle. People continue paying for insurance policies, contributing to pensions, and managing their savings, whether the economy is booming or slowing. That structural demand supports stable cash flow, which, in turn, underpins POW’s dividend. The dividend stock has a long history of maintaining and growing its payout, even during periods of economic stress.

For lifelong TFSA income, POW’s biggest strength is reliability. It may not be the fastest-growing stock on the TSX, but it doesn’t need to be. Inside a TFSA, where dividends compound tax-free, steady income matters more than short-term share price moves. POW offers exposure to essential financial services, a strong dividend backed by recurring earnings, and a business model designed to endure recessions rather than chase cycles.

Bottom line

In the end, Power Corporation represents the kind of dividend stock TFSA investors can own through good markets and bad without losing sleep. Its recession-resistant earnings, dependable dividend, and conservative approach make it a practical choice for building tax-free income that can last decades. And right now, here’s what just $7,000 could bring in:

COMPANYRECENT PRICENUMBER OF SHARESDIVIDENDANNUAL TOTAL PAYOUTFREQUENCYTOTAL INVESTMENTPOW$73.0795$2.45$232.75Quarterly$6,941.65

For investors focused on stability, consistency, and lifelong income rather than excitement, POW fits the bill.

The post A Recession-Resistant Dividend Stock for Lifelong TFSA Income appeared first on The Motley Fool Canada.

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More reading

• A Decade From Now, You’ll Be Glad You Bought These Magnificent TSX Dividend Stocks
• My Favourite Dividend Stocks for Canadians to Buy in 2026
• 2 Canadian Dividend Stocks That Could Deliver Reliable Returns for Years
• 2 Canadian Dividend Stocks That Are Smart Buys for Capital Growth
• The Ideal Canadian Stock for Dividends and Growth

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.