Many investors are busy buying shares of stocks that benefit from this rise. However, it is important to remember that you cannot ignore your long-term investment strategy during such times. While you should take advantage of every opportunity you can find among growth stocks, setting aside some space in your tax-free savings account (TFSA) for dividend stocks can be a worthwhile decision.
Today I’ll discuss two of the smartest dividend stocks to buy if you have $1,000 of available contribution room in your TFSA.
Enbridge
Enbridge Inc. (TSX:ENB) has long been a favorite stock for dividend-oriented investors looking for significant returns. The integrated energy company with a market capitalization of $142.3 billion owns extensive midstream assets, which transport hydrocarbons across North America. In recent times, it has become one of the utility sector giants in the region as it continues to expand its portfolio through massive capital programs and acquisitions.
Enbridge became the largest operator of natural gas utilities in North America after a $14 billion campaign in 2024 to acquire three U.S. natural gas companies. In addition to the stability the utility brings, its traditional energy businesses and growing renewable energy portfolio position the company for a solid future in the years to come.
At the time of writing, ENB stock is trading at $65.24 per share and paying investors $0.97 per share, which translates into a juicy 6% dividend yield that you can lock into your self-driving portfolio.
Fortis
While long-term investors have occasionally expressed reservations about Enbridge stock, Fortis Inc. (TSX:FTS) has never disappointed dividend seekers. Fortis is a mainstay in many investor portfolios. The pureplay utility giant has a market capitalization of $35 billion and owns several natural gas and electric utilities in Canada, the US and the Caribbean.
The dividend stock has been delivering higher payouts to investors for over fifty years, and its defensive business model allows it to continue to do so. The majority of revenue comes from long-term contracted assets within highly regulated markets. This means predictable earnings and cash flows that management can use to grow dividends and fund capital programs.
At the time of writing, Fortis stock is trading at $69.25 per share and paying its investors $0.64 per share per quarter, which translates into a 3.7% dividend yield that you can lock into your self-directed TFSA portfolio today.
Silly takeaway
Dividend investing in the right stocks can become a gift that keeps on giving. By allocating part of the contribution space in your TFSA to dividend stocks, you can ensure that the donations are tax-free. Given this, Enbridge and Fortis stocks can be excellent long-term investments for your self-directed TFSA portfolio.
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