Want Set-and-Forget Income? This 4% Yield TSX Stock Could Deliver in 2026

If you want a Tax-Free Savings Account (TFSA) that lets you sleep well, a boring dividend stock can be a gift. Utilities are boring in the best way. People keep the lights on through recessions, job changes, and the random chaos of life. That can translate into steadier revenue and a dividend that doesn’t rely on perfect economic conditions. Emera (TSX:EMA) is often pitched in that lane, but the real question is whether it still looks like a smart set-and-forget buy heading into 2026.

EMA

Emera is a regulated utility owner with operations and investments across North America, and its growth story leans heavily on Florida. For beginners, regulated is the keyword. It generally means earnings are tied to approved spending and allowed returns, not to commodity swings. In exchange, it needs constant investment, and that means debt and interest rates always matter. Think of it as a toll road model for electricity and gas.

On performance, the dividend stock reminded everyone why utilities can surprise. As of writing, shares are up about 34% over the last year. The 52-week range runs roughly from $47 to $67, so it is not hiding in the cheap seats right now. That’s fine, but it changes your mindset. You’re buying into a recovering story, not scooping up a bargain after a bad headline.

Into earnings

Income is the reason most beginners care. Emera’s annual dividend is about $2.91 per share, or a bit above a 4% yield at recent prices. The payout ratio is around 60% at writing, which suggests the dividend is sized to be sustainable rather than stretched. The dividend stock has also tended to be less jumpy than the broader market, which is exactly what you want from a core TFSA holding meant to steady your nerves.

The latest quarter helps explain the renewed confidence. In its third quarter 2025 results, Emera reported adjusted earnings per share (EPS) of $0.88 and reported EPS of $0.76. Adjusted net income was $263 million versus $236 million a year earlier, with stronger results at Tampa Electric partly offset by softer performance at Nova Scotia Power and New Mexico Gas Company, plus higher corporate costs. That’s utility progress in plain language: steady operating improvement, not a dramatic one-off win.

Looking ahead

More important than the quarter is the roadmap management paired with it. Emera laid out a $20 billion capital and funding plan for 2026 to 2030 and extended its 7% to 8% rate base growth outlook through 2030, with nearly 80% of planned investment aimed at Florida. It also highlighted the completion of the Peoples Gas rate case process, which provides regulatory clarity through 2028. For beginners, this is the thesis in one sentence: spend a lot, get approved returns, and grow earnings in a measured, visible way.

Valuation keeps the story grounded. After a strong year, Emera trades around 20 times forward earnings, so priced like a stable compounder, not a distressed bargain. Debt levels are meaningful, which is normal for utilities. Yet it’s also why rate swings can still move the dividend stock around.

Bottom line

If you buy it for 2026, buy it for the combination of dividend income and regulated growth, and accept that the best outcome comes from holding through the boring middle and add over time. Right now, here’s what $7,000 in this dividend stock can earn even now.

COMPANYRECENT PRICENUMBER OF SHARESDIVIDENDANNUAL TOTAL PAYOUTFREQUENCYTOTAL INVESTMENTEMA$66.90104$2.91$302.64Quarterly$6,957.60

The main things that would change the story are higher-for-longer rates, regulatory surprises, or execution hiccups on the big capital plan. So, keep an eye out as you continue to consider investing.

The post Want Set-and-Forget Income? This 4% Yield TSX Stock Could Deliver in 2026 appeared first on The Motley Fool Canada.

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More reading

• The Best Dividend Stocks for Canadians in 2026
• 10 Years From Now You’ll Be Thrilled You Bought These Outstanding TSX Dividend Stocks
• Here’s the Average TFSA Balance at Age 50 in Canada
• Passive Income: Is Fortis Stock Still a Buy for its Dividend?
• 3 Canadian Stocks With Highly Sustainable Dividends

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