TFSA Investors: Don’t Chase Returns. Do this instead

Investors in Tax Free Savings Accounts (TFSA) are tempted by high returns when the math looks so clean. They put money in, collect revenue and repeat. But returns can be a pitfall within a TFSA, as the market often pays out the highest payouts just before a cut. If the dividend falls, you lose income, and often you lose the stock price as well. Do this instead: buy a business with growing demand and rising cash flow, then let it build up tax-free. That’s why I would consider this dividend stock today.

MDA

MDA space (TSX:MDA) fits the idea of ​​“don’t chase returns” because it is based on long-cycle demand and not consumer mood. It designs and builds satellite systems, space robotics and geo-intelligence solutions. In short, it makes tools that allow governments and companies to see the Earth, move data, and operate in orbit. It seems relevant now as defense priorities, climate monitoring and broadband constellations continue to attract capital, and Canada wants domestic capacity in strategic technology.

Over the past year, the news flow has proven that even big themes have sharp edges. In September 2025, EchoStar terminated a major low Earth orbit satellite contract, and MDA pointed to a sudden shift in EchoStar’s strategy related to spectrum discussions and a planned spectrum sale. Those kinds of surprises can quickly hit sentiment, as investors treat the backlog like a security blanket. It also forces management to show that the demand is broader than one large customer.

The story improved soon afterward. In December 2025, the Canadian Space Agency awarded MDA an initial contract tied to a RADARSAT Constellation Mission replenishment satellite, and the company said the full mission contract is expected to be awarded in 2026, subject to approvals. This strengthens MDA’s role in Canada’s space industrial base. It also adds a government-linked workflow that can last for years, helping smooth out the ups and downs in the private sector.

There’s more to come

MDA also urged to deepen its advantage of “building more internally.” It completed the acquisition of SatixFy in July 2025, bringing satellite communications chip technology to the company to strengthen its end-to-end digital constellation offering. Integration can get messy, but vertical capacity can reduce vendor bottlenecks and support differentiated products as customers push for more software-defined satellites and higher throughput.

Recent figures show why the market continues to give the company the benefit of the doubt. In the third quarter (Q3) of 2025, it reported revenue of $409.8 million and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $82.8 million, ending the quarter with a backlog of $4.4 billion. That scale supports profitability as production increases, and the backlog provides insight that many industrial companies would like to have.

As we look to 2026, investors should focus on execution against clear targets. Management targeted 2025 adjusted EBITDA of $305 million to $320 million, with margins around 19% to 20%, providing a practical measure of operational discipline. If it continues to convert backlogs without cost overruns, the narrative shifts from “space hype” to repeatable industrial growth. If the conversion fails, the stock could quickly revalue because big programs fail and the market hates surprises.

Silly takeaway

Could it be a purchase for others? You could, if you want TFSA protection that comes from demand that isn’t dependent on a sense of excitement among shoppers, and on contracts that can run for years. It can also be the wrong choice if you need a smooth ride, as a delayed launch or canceled program can shake sentiment. For 2026, the outlook comes down to backlog completion and consistent margins as projects move from promise to production. If you can do both, you might not miss the high yield at all.