Do you have $21,000? A dividend stock worth buying in a TFSA

For Canadian investors who have been contributing to their TFSA (Tax-Free Savings Account) for the past few years (let’s say the last three) but haven’t yet invested the proceeds in stocks, February 2026 might be a good time to go bargain hunting, especially given the recent volatility hitting the TSX index. No doubt, the TSX Index may have had some notable bumps in the road in January, but the longer-term trend still appears intact. Combined with modest valuation multiples, intriguing growth stories and the potential for an economic recovery throughout the year, Canadian stocks could be worth buying with both hands.

Undoubtedly, the 2026 TFSA contribution limit has been reset at $7,000. That’s the same as it has been for a few years, despite all the inflation we’ve experienced lately. If you’ve been making regular contributions since 2024 and haven’t bought a single share yet, you might be looking at just over $21,000 parked in your TFSA.

While the stock market can be a scarier place to put new money to work, especially with the chatter about AI and the recent decline in precious metals markets, I still think younger investors who won’t need the TFSA cash for the next decade may prefer dividend stocks to low-yield GICs, or worse, cash. While I still think there’s a time and a place for GICs, I think interest rates have fallen enough that dividend stocks are relatively more attractive, even if you’re not exactly paying the lowest price after an incredible market rally in 2025.

CIBC

Shares of CIBC (TSX:CM) are starting to regain momentum after going sideways in recent weeks. I think there is room for another upside as the bank looks to get through the upcoming earnings season. No doubt the big banks are experiencing improved profitability prospects, and while expectations are higher, I would much rather be a buyer of CIBC on strength rather than weakness, especially given the macroeconomic tailwinds at play. If there is actually more strength to be found in the capital markets as the bank continues to find success in the US, I think the shares remain incredibly cheap at around 15.1 times the price-to-earnings (P/E) ratio.

Add to that the potential for rising mortgage demand (CIBC has a sizeable book of domestic mortgages) and other efforts (think data analytics and AI), and I think there’s still room for the bank to impress against expectations. The 3.4% dividend yield isn’t nearly as high as it used to be, but I think CM stock can make up for the compressed yield with capital gains as 2026 could be another bullish year for Canada’s big banks.

Of course, $21,000 in TFSA cash could be too much to deploy at once, especially with shares hitting new all-time highs. Personally, I would look for a quarter or a third of a position here, with the intention of adding a pullback sometime in the next few quarters. CIBC is back on track, and I don’t think the company will disappoint anytime soon, especially as it looks like the stock will be at a greater premium.