Too often, Canadians treat the TFSA like a trading account or fill it with speculative stocks, hoping to get lucky instead of letting the account do what it does best.
The real benefit of a TFSA is the long-term compounding. When you own high-quality dividend stocks within a TFSA, every dollar of income is tax-free, and when those dividends are reinvested, that compounding effect can quietly escalate over decades.
That’s why the best TFSA investments are companies with reliable and often defensive operations, predictable cash flow and a long history of paying and growing dividends. These are the types of stocks you can buy and hold in different market environments and be confident in their long-term potential.
So with that in mind, if you’re looking for high-quality Canadian dividend stocks to buy in your TFSA today, here are four top picks that you can own with confidence for the long term.
Utilities are among the best Canadian dividend stocks to buy in a TFSA
When it comes to finding reliable dividend stocks for your TFSA, high-quality defensive companies are often among the best choices to consider. That’s why these are two of the best Canadian dividend stocks to buy in your TFSA Accept (TSX:EMA) and Fortis (TSX:FTS).
You don’t have to buy both, although you can for diversification purposes, but each of these stocks offers strong reliability and defensive capabilities, while also consistently increasing its dividend every year.
For example, Emera owns electricity and gas utilities in Canada, the US and the Caribbean, and the majority of its revenue comes from regulated activities with permitted returns.
Fortis, meanwhile, also owns regulated utilities in North America and the Caribbean. Precisely for that reason, both stocks are incredibly reliable. Not only are utilities heavily regulated, making their future cash flow and revenues highly predictable, but demand for electricity and natural gas does not disappear during recessions.
The main difference between the two, if you decide now, is that Fortis offers higher dividend growth potential in the coming years. At the same time, however, Fortis has an attacker yield of just 3.5%, which is lower than Emera’s current forward yield of 4.3%.
So if you want higher returns in exchange for lower dividend growth potential in the short term, Emera is your best bet. If you prefer growth potential over a higher initial return, then Fortis is the share for you. Anyway, these two are great TSX stocks are easily some of the best Canadian dividend stocks you can buy in your TFSA right now.
Two reliable dividend stocks that you can easily own for years to come
In addition to Fortis and Emera, there are two more high-quality Canadian dividend stocks you can buy with your TFSA today Nutrients (TSX:NTR) and Choice Properties REIT (TSX:CHP.UN).
Nutrien is ideal because it is the world’s largest potash producer and a major supplier of nitrogen and phosphate, making it a crucial player in global food production.
Fertilizer demand can be cyclical, but Nutrien is a solid choice for the TFSA because the industry’s long-term expansion will be driven by population growth and the need to increase crop yields. That gives Nutrien real long-term growth potential.
The stock also pays a solid dividend, currently yielding around 3.1% and generating strong cash flow from its vertically integrated operations, making it one of the best Canadian dividend stocks to buy and hold for years in a TFSA.
Meanwhile, Choice Properties is a top REIT to buy for dividend investors because its portfolio is anchored by needs-based retail and industrial properties.
This is crucial because it gives Choice extremely stable occupancy and predictable rental income, which is exactly what you expect from a dividend share in a TFSA. People are still buying groceries and basic necessities regardless of the economy, and that demand supports consistent cash flow.
Because Choice offers a forward yield of around 5% and continues to increase distribution, it’s easily one of the best Canadian stocks to buy in a TFSA.
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