The Ideal TFSA Stock: A 5.2% Yield Paying Constant Cash

2026-03-20 20:00:00 ET

Investing in top dividend stocks with attractive yields can help generate steady cash, making them ideal for a Tax-Free Savings Account (TFSA) . To generate worry-free income, investors should look for TSX stocks with strong fundamentals , a solid history of distributions, and sustainable payouts.

Moreover, holding such dividend-paying stocks within a TFSA further enhances your overall returns. Because all investment returns earned in a TFSA are tax-exempt, investors can fully retain dividend income and capital gains.

Against that backdrop, here is an ideal TSX stock offering a 5.2% yield for your TFSA. It pays constant cash across all market conditions.

The ideal TFSA dividend stock

TFSA investors looking for an ideal stock paying a steady dividend should consider Enbridge ( TSX:ENB ). The energy infrastructure company offers a high dividend yield and has a long-standing record of reliable payouts and steady growth, making it well-suited for income-focused portfolios.

Enbridge has distributed dividends for more than seven decades and increased its payout at a compound annual growth rate (CAGR) of 9% since 1995. This consistency highlights its ability to perform across varying commodity cycles and economic environments while continuing to return capital to shareholders.

Supporting Enbridge’s resilient payouts is its low-risk, diversified business model. Enbridge generates cash flow from more than 200 high-quality assets, thereby reducing earnings volatility and supporting stable distributable cash flow (DCF). Importantly, a significant portion of its EBITDA is derived from regulated operations or long-term, take-or-pay contracts, limiting direct exposure to commodity price fluctuations. This structure provides a predictable revenue base supporting its dividend program.

Additionally, much of Enbridge’s EBITDA is linked to inflation, offering a hedge against rising costs and supporting cash flow growth over time.

Notably, Enbridge’s extensive energy infrastructure network connects major supply regions with key demand centers. This scale and integration contribute to high asset utilization and position the company to benefit from energy demand trends.

In December 2025, Enbridge announced a 3% increase in its quarterly dividend to $0.97 per share, equivalent to $3.88 annually. At current price levels, this represents a yield of approximately 5.2%. In short, Enbridge offers stability amid volatility in oil and gas prices, steady income, and modest growth potential, making it a strong candidate for TFSA investors seeking steady cash flow.

Make $1,000/year in tax-free income from ENB stock

Enbridge’s diversified revenue and cash flow, highly utilized assets, and low-risk contracted business position it well to deliver strong DCF per share, supporting higher dividend payments in the years ahead.

Over the past five years, Enbridge has returned approximately $38 billion to shareholders through dividends. Looking ahead, the company expects to distribute between $40 billion and $45 billion over the next five years, supported by expanding regulated and contracted cash flows. Its targeted DCF payout ratio of 60% to 70% is sustainable and provides sufficient retained capital to fund future growth initiatives.

Enbridge is targeting accretive brownfield investments, which leverage existing infrastructure and are supported by favourable energy market fundamentals. In addition, Enbridge’s secured capital backlog has reached $39 billion, with projects extending through 2033. This backlog provides visibility into future earnings expansion and cash flow stability.

Enbridge is well-positioned to benefit from long-term structural trends in global energy demand. Increasing electricity consumption, particularly from AI-driven data centres, alongside ongoing energy transition initiatives, is expected to create incremental growth opportunities across its asset base.

At current dividend levels, holding approximately 258 ENB shares generates about $250 in quarterly income, based on a payout of $0.97 per share. For investors utilizing a TFSA, this equates to more than $1,000 in annual tax-free income.

The post The Ideal TFSA Stock: A 5.2% Yield Paying Constant Cash appeared first on The Motley Fool Canada .

Fool contributor Sneha Nahata has no position in any of the stocks mentioned. The Motley Fool recommends Enbridge. The Motley Fool has a disclosure policy .

2026