The One Canadian Stock I’d Keep in My TFSA Indefinitely

When it comes to building lasting wealth in a Tax-Free Savings Account (TFSA), investors should start with companies that can deliver dependable income, resilient operations, and long-term growth. For me, one Canadian stock stands out above the rest: Brookfield Infrastructure Partners (TSX:BIP.UN).

This infrastructure giant combines the stability of defensive assets with attractive long-term growth opportunities, making it an ideal stock to hold indefinitely in a TFSA.

A reliable income grower built for the long term

Brookfield Infrastructure Partners operates essential assets across utilities, transport, midstream energy, and data infrastructure. These are businesses that households and corporations rely on regardless of economic conditions, which helps the company generate stable and predictable cash flows.

That reliability has translated into an impressive track record. Since being spun off from its parent company, Brookfield Infrastructure Partners has increased its cash distribution for 17 consecutive years. Over the last decade, its distribution has grown at an annualized rate of 7.3%, comfortably ahead of inflation.

Importantly, management still expects annual distribution growth of 5% to 9% going forward while maintaining a healthy payout ratio of 60% to 70% of funds from operations (FFO). That combination of yield and growth is exactly what TFSA investors should seek because all future gains and distributions would compound tax-free.

Strong results continue to fuel growth

Brookfield Infrastructure Partners’s recent performance shows why the business remains so compelling. In the first quarter, FFO per unit climbed 9.8% year over year to US$0.90. Organic growth reached the high end of management’s target range of 6-9%, supported by inflation-linked revenues and strong utilization in its midstream operations.

The company also continues to expand through disciplined investment. Over the past year, it completed approximately US$1.4 billion in new investments while recycling capital from selling US$3.6 billion of mature assets. This strategy allows Brookfield Infrastructure Partners to continuously reposition its portfolio toward higher-growth opportunities without overextending its balance sheet.

One of the biggest growth drivers has been its rapidly expanding data segment. FFO from the segment surged 46% year over year to US$149 million, fueled by contributions from its U.S. bulk fibre network acquisition in Q3 2025 and strong growth in data storage and data centre operations. With artificial intelligence, cloud computing, and digital connectivity driving demand worldwide, this business could become an even more powerful earnings engine over time.

Meanwhile, the company’s utilities and transport operations continue to provide dependable stability, balancing out higher-growth areas of the portfolio.

Why it belongs in a TFSA forever

At the end of the quarter, Brookfield Infrastructure had roughly US$9.6 billion in capital projects waiting to be commissioned over the next two to three years, with most tied to data infrastructure (76% of the backlog) and utilities (13%). That backlog provides excellent visibility into future growth over the next several years.

At $52.65 per unit at writing, the stock offers a distribution yield of approximately 4.7%, which is more than double the broader Canadian market yield. For long-term investors, this creates an appealing combination of immediate passive income and future capital appreciation.

While analysts currently view the stock as fairly valued, quality companies rarely go on sale. Brookfield Infrastructure Partners’s defensive business model, growing distributions, and expanding exposure to data infrastructure make it a stock that can continue rewarding long-term investors.

Investor takeaway

Brookfield Infrastructure Partners checks nearly every box for TFSA investors: dependable cash flow, recession-resistant assets, strong distribution growth, and long-term expansion opportunities. Its exposure to essential infrastructure and fast-growing data infrastructure assets gives it both stability and upside potential. For investors seeking a Canadian stock they can confidently buy and hold for decades, Brookfield Infrastructure Partners remains one of the best choices on the Toronto Stock Exchange and particularly attractive on meaningful market dips.

The post The One Canadian Stock I’d Keep in My TFSA Indefinitely appeared first on The Motley Fool Canada.

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Fool contributor Kay Ng has positions in Brookfield Infrastructure Partners. The Motley Fool recommends Brookfield Infrastructure Partners. The Motley Fool has a disclosure policy.