Take Full Advantage of Your TFSA With These Dividend Stars

The Tax‑Free Savings Account (TFSA) provides tax-free growth of gains and income. That’s part of the reason the account is one of the most powerful tools available to Canadian investors. This is especially true when it’s combined with income-producing stocks to make a true TFSA dividend portfolio.

The right dividend stocks can offer both the income and stability that a portfolio needs. Picking the right companies that offer growing dividends and established payment histories can help to smooth out volatile times with dependable returns.

The market gives us plenty of great examples of stocks that can be core to that TFSA dividend portfolio.

Here’s a look at a trio of picks that any investor should consider right now.

A high‑yield anchor for any long‑term portfolio

Most investors are familiar with Enbridge (TSX:ENB). The energy infrastructure behemoth is a long-time favourite among investors, and for good reason.

Enbridge operates one of the largest energy infrastructure networks in North America, moving massive amounts of crude oil and natural gas. Its business model is built on regulated, contracted cash flows that support consistent dividend payments.

In addition to its popular pipeline business, Enbridge also operates a renewable energy business and natural gas utility. Both adhere to that regulated, contracted business model, generating stable cash flows that leave room for growth and dividend investments.

That dividend is the reason TFSA investors continue to turn to the stock. Enbridge has paid dividends for over 70 years and has increased its payout annually for three consecutive decades without fail.

As of the time of writing, Enbridge offers a 5.2% yield, making it one of the better-paying options on the market.

This makes Enbridge a reliable payer and top pick for TFSA dividend seekers.

A dependable bank with global reach

It would be hard to mention top TFSA dividend picks without mentioning at least one of Canada’s big bank stocks. Today, that stock is Bank of Nova Scotia (TSX:BNS).

Scotiabank, like its big bank peers, benefits from the stability of the well-regulated Canadian financial system. That domestic arm provides the bulk of the bank’s revenue, coated with a defensive moat that is hard to beat.

Scotiabank is known as Canada’s most international bank. The bank’s international exposure to higher-growth markets around the world provides a meaningful lift to the bank.

In recent years, Scotiabank has shifted its growth focus from developing markets in Latin America to more mature markets in the U.S. and Mexico.

That level of diversification is something that its peers lack and provides a unique opportunity for investors.

Turning to income, Scotiabank has paid dividends for well over a century without missing a payment. The bank has also provided investors with annual upticks to that dividend, with its current streak going back over a decade.

As of the time of writing, Scotiabank offers a yield of 4.6%, making it one of the better-paying options among the big banks.

For investors seeking to build a TFSA dividend portfolio, Scotiabank is an attractive option for those seeking a mix of income and long-term growth.

A stable, defensive cash machine

Completing the trio of TFSA dividend stocks is Fortis (TSX:FTS). Fortis is one of the most reliable utility companies in North America with a reputation for its stability across market cycles.

Fortis is a utility stock, operating regulated electric and gas utilities across multiple markets in Canada, the U.S. and the Caribbean. The stable and recurring revenue stream those assets generate makes Fortis one of the most defensive operations on the continent.

That defensive stability has also allowed Fortis to build one of the longest dividend‑growth streaks in Canada. Fortis offers investors a quarterly dividend with a yield of 3.2%. Adding to that appeal is Fortis’ streak of 53 consecutive years of annual increases.

For TFSA holders, Fortis offers peace of mind. Utility services are essential services that are less volatile during economic downturns. This makes Fortis ideal for any long-term portfolio.

The bottom line

Building a TFSA dividend portfolio doesn’t need to be complicated. Reliable dividend stocks like Enbridge, Bank of Nova Scotia, and Fortis offer a balanced mix of yield, stability, and long‑term potential.

Together, they create a diversified income foundation that can grow tax‑free for years to come. For investors focused on building lasting wealth, these dividend stars offer a straightforward and dependable path forward.

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

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Fool contributor Demetris Afxentiou has positions in Bank of Nova Scotia, Enbridge, and Fortis. The Motley Fool recommends Bank of Nova Scotia, Enbridge, and Fortis. The Motley Fool has a disclosure policy.