When building a TFSA focused on income and looking for the best dividend stocks to buy, it can be easy to fall into the trap of trying to find the highest yield possible.

Of course, earning as much income as possible is ideal, but the best investments to hold in your TFSA will almost always offer more than just income today. Because the best stocks to buy are businesses that can continue growing over time, increasing their cash flow and distributions along the way.

That consistent growth is what’s so important. It’s what makes them so powerful in a tax-free account. Because when you combine consistent income with long-term compounding, every dollar you earn and every bit of growth stays in your pocket.

That’s why Brookfield Infrastructure Partners (TSX:BIP.UN) is easily one of the best and most attractive dividend stocks Canadians can own in a TFSA.

It’s a global business with diversified operations, resilient cash flow, and a long history of paying an attractive, growing dividend, all while continuing to increase shareholder value over the long term.

Why Brookfield Infrastructure is one of the best dividend stocks to buy in a TFSA

One of the biggest reasons Brookfield Infrastructure is such a compelling long-term investment is the type of assets it owns and the resiliency of its operations as a whole.

For example, the company operates a globally diversified portfolio of infrastructure assets, which include businesses such as utilities, pipelines, transportation networks, and data-related assets. These are all essential services that economies rely on every day, regardless of what’s happening in the market.

That’s what helps support stable and predictable cash flow, making it such a reliable dividend stock in the first place. Furthermore, nearly all of its cash flow is backed by long-term contracts or tied to inflation, which adds another layer of reliability.

So even during periods of economic uncertainty, the business continues to generate the income needed to support its distribution.

In addition, though, what really makes Brookfield one of the top dividend stocks to buy in a TFSA is its significant long-term growth potential.

In fact, it’s constantly investing in new projects and expanding its portfolio around the world, while benefiting from trends like increasing energy demand, electrification, population growth, and the continued buildout of digital infrastructure.

Furthermore, Brookfield is consistently recycling capital by selling more mature assets and reinvesting in new opportunities.

That’s important because Brookfield doesn’t just rely on organic growth to fund its consistently growing distribution. It’s also what allows Brookfield to return more cash to investors each year while continuing to expand its portfolio.

So, while it offers an attractive yield right now of roughly 4.6%, more importantly, the fact that it aims to increase that payout by 5% to 9% annually is just as attractive and why it’s one of the best dividend stocks to buy in a TFSA.

Instead of just buying a stock to collect income, you’re owning a business that continues to expand, generate more cash, and increase what it returns to you year after year.

The Foolish takeaway

Although a high-yield dividend stock can be attractive on the surface, the best dividend stocks to buy and hold in your TFSA are actually the businesses with reliable operations that can continue growing for years.

That’s why Brookfield is one of the top picks to consider today, with its combination of reliable cash flow, a strong yield, and consistent long-term growth.

The post Here’s an Ideal TFSA Dividend Stock That Pays Consistent Cash appeared first on The Motley Fool Canada.

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• 2 Safer High-Yield Dividend Stocks for Canadian Retirees

Fool contributor Daniel Da Costa has positions in Brookfield Infrastructure Partners. The Motley Fool recommends Brookfield Infrastructure Partners. The Motley Fool has a disclosure policy.

Are you looking for stocks that have a shot at beating the market?

If so, that’s a tall order.

Beating the market is one of the rarest investing achievements in the world, being accomplished by less than 10% of investors over the very long (e.g., +15-year) term. Nevertheless, there are some basic principles behind which stocks tend to outperform. They tend to be profitable, they tend to be relatively small, and they tend to have strong positions in their industries. Given these characteristics, we can come up with a short list of TSX superstar stocks that have a shot at outperforming in 2026.

Alimentation Couche-Tard

Alimentation Couche-Tard Inc (TSX:ATD) is a Canadian gas station and convenience store company that has been underperforming for some time. The underperformance is quite hard to explain. The company has a very strong gas station franchise (Circle K), which is probably the most recognizable in the country. It also operates in the U.S. and Europe. Last quarter, its revenue shot up 20% on a quarter-over-quarter basis (though it was down on a year-over-year basis). Next quarter, the company is likely to report a substantial increase in fuel sales revenue due to high oil prices in the period about to be reported. Despite all of this, the stock is still down from 2024 when fuel prices were nowhere near what they’ve been lately. All in all, ATD has potential.

Brookfield Asset Management

Brookfield Asset Management (TSX:BAM) is one of Canada’s strongest financial services companies. It has an ultra-high-margin alternative asset management business that has an astonishing 57% free cash flow margin, and other excellent profitability metrics. It has US$67 billion (about $91 billion) worth of committed but uninvested capital that will be invested and start earning fees in the next few years. Finally, it has an excellent reputation, with financial legends like Howard Marks on the board and praise from top investors like Bill Ackman and Mohnish Pabrai.

Despite the truckload of virtues that Brookfield Asset Management has going for it, the company’s stock is still down 7% for the year to date and 16% over the last 12 months. True, it was a little pricey at the start of the slide, trading at about 40 times earnings — but recall all that committed capital that will soon start earning fees. Overall, BAM looks set for a reversal.

Metro

Metro (TSX:MRU) is one of Canada’s best-kept secrets. A grocery store, it has sort of a niche as a smaller grocer that sets up shop near subway trains and other such locations where young urban professionals like to shop. This is a niche that the “big two” national grocers haven’t tapped, so MRU appears to have a strong competitive position. The company’s recent earnings results have been consistent with what was just observed: revenue was up 3.8% and earnings up 5.6% in the trailing 12-month period. Despite this, the stock is down 15% over the last 12 months. Nothing is ever for certain, but I think there might be an opportunity here.

The post 3 TSX Superstars That Could Beat the Market in 2026: Get In Now appeared first on The Motley Fool Canada.

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• A Practical Way to Use Your TFSA Contribution Room to Build Monthly Cash Flow
• The 3 Stocks I’d Buy and Hold Into 2026
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• How Your 2026 TFSA Contribution Could Eventually Reach $280,000 or More

Fool contributor Andrew Button has positions in Brookfield Asset Management. The Motley Fool has positions in and recommends Alimentation Couche-Tard. The Motley Fool recommends Brookfield Asset Management. The Motley Fool has a disclosure policy.

A broad-market exchange-traded fund (ETF) can make investing simple. It spreads money across dozens, hundreds, or even thousands of companies, which helps lower risk. But some investors want more control. They want to know exactly what they own and why they own it. That’s where a small stock portfolio can work as an ETF alternative. The catch is concentration. Three stocks can’t offer the same protection as a full ETF. So the strongest setup may be a focused basket of top Canadian stocks, with an ETF added on the side for balance.

CNQ

Canadian Natural Resources (TSX:CNQ) could anchor that basket. The company is one of Canada’s largest oil and gas producers, with operations across Western Canada, the North Sea, and offshore Africa. Canadian Natural has increased its dividend for 26 straight years, with a 20% compound annual growth rate over that period. That’s a huge number in a cyclical sector. It tells investors management has treated the dividend as a serious long-term priority, even through oil crashes and recessions.

The latest results show the scale of the business. In the first quarter of 2026, production reached about 1.6 million barrels of oil equivalent per day. Adjusted net earnings came in at $2.4 billion, or $1.17 per share. Adjusted funds flow reached $4.4 billion, or $2.10 per share. The company returned about $1.5 billion to shareholders during the quarter, including $1.2 billion in dividends and $300 million in share buybacks.

That makes CNQ a strong first pick for this mini portfolio. It offers energy exposure, dividend growth, and massive cash generation. The quarterly dividend now sits at $0.625 per share. Of course, the risk is clear. Oil prices can drop quickly, and energy stocks can fall hard when sentiment turns. That’s why CNQ works best as one pillar, not the whole plan.

TD

Toronto-Dominion Bank (TSX:TD) gives the portfolio a very different type of exposure. TD stock is one of Canada’s largest banks, with Canadian banking, U.S. banking, wealth management, insurance, and wholesale banking operations. TD stock also has a recovery angle. The bank has dealt with pressure from U.S. anti-money-laundering issues and growth restrictions, which hurt sentiment around the stock. That sounds uncomfortable, but it may also create opportunity if the bank repairs trust and rebuilds momentum.

The latest quarter showed why TD stock still deserves attention. In the first quarter of 2026, net income reached $4 billion, up from $2.8 billion a year earlier. Adjusted net income came in at $4.2 billion, compared with $3.6 billion. Adjusted diluted earnings per share (EPS) hit $2.44, up from $2.02. Wholesale Banking stood out, with record adjusted net income of $561 million and record revenue of $2.5 billion, up 24% year over year.

TD stock still carries risk. U.S. regulatory pressure, credit losses, and slower loan growth could weigh on results. Yet the stock gives this portfolio a blue-chip financial core. It also brings dividend income and potential upside if investors warm back up to the bank’s turnaround story.

CN

Canadian National Railway (TSX:CNR) rounds out the portfolio with infrastructure. CN operates one of North America’s largest rail networks, moving freight across Canada and into the United States. It carries grain, potash, intermodal containers, forest products, metals, energy products, autos, and consumer goods.

In the first quarter of 2026, revenue came in at $4.4 billion, down 1% year over year. Net income was $1.1 billion, also down 1%. Diluted EPS rose 1% to $1.87, while adjusted diluted EPS fell 3% to $1.80. The standout number was free cash flow, which climbed 44% to $900 million.

CNR adds balance because railways have hard-to-replicate assets and long-term pricing power. The risk is that freight volumes can weaken if the economy slows, and costs can pressure margins. Still, CN gives this mini portfolio a defensive industrial backbone.

Bottom line

A three-stock portfolio won’t replace a broad ETF perfectly. Together, these create a useful Canadian portfolio with value, dividends, and long-term growth potential. Add a broad ETF beside it, and the plan gets even stronger.

The post 1 Canadian ETF Alternative: A Stock Portfolio in 3 Picks appeared first on The Motley Fool Canada.

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• How Your 2026 TFSA Contribution Could Eventually Reach $280,000 or More

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends Canadian National Railway and Canadian Natural Resources. The Motley Fool has a disclosure policy.

Canadians are lucky to have the opportunity for tax-free wealth building through the TFSA (Tax-Free Savings Account). Any chance you can get to invest tax-free should be used and maximized.

Dividend investing fits perfectly with a TFSA strategy. As long as the dividend stocks you hold are domestic, you won’t get charged any income tax on the dividend income you earn.

Reinvest your dividend income to compound TFSA value

If you don’t need the income, you can reinvest the proceeds into buying more stocks. More stocks equal more income and more income equals more stocks you can buy. Over time, it can compound into a considerable amount of wealth.

When I invest in dividends, I want stocks that can sustainably pay and grow their dividend income. While overtly high-yielding stocks (over 7%) can be attractive for their immediate cash return, they often have an elevated yield due to some risk the market is factoring in.

As a result, I prefer to hunt for dividend stocks with a yield in the range of 1% to 5%. I want my companies to be able to sustain dividend growth from growing cash flows and earnings. I also want them to have room to re-invest capital into growth, not just pay it all out in dividends.

If I had $20,000 to invest in my TFSA, here are two stocks I’d be happy to own for both income and capital returns.

AltaGas: A resilient business with growth prospects

The first stock I’d put $10,000 of TFSA cash into is AltaGas (TSX:ALA). It has a 2.5% yield. You would earn $62.31 per quarter or $249.24 annually.

While that may not seem like a lot, AltaGas has been delivering very strong capital returns as well. Its stock is up 27% in 2026 and 122% in the past five years.

AltaGas operates two relatively boring businesses: a U.S. natural gas utility and a Canadian midstream/export business. Yet, both are growing at high single-digit rates. In fact, very strong energy prices may support it hitting the high end of its guidance range in 2026.

The company has grown its dividend by a 6% compounded annual rate since 2021. It continues to target 5–7% dividend growth for the coming years. This is a great stock for its low-risk business model, steady growth, and growing dividend.

Chartwell: A TFSA stock riding a long tailwind

Chartwell Retirement Residences (TSX:CSH.UN) is another stock to buy with $10,000 in a TFSA. It has a 3% yield. You would earn $24.75 monthly or $296.98 annually.

This is Canada’s largest retirement residence provider. It has a strong brand and national scale. As baby boomers retire and age, Chartwell is seeing a surge in demand for retirement and care communities. Yet, current supply is not keeping up with growing demand. This all means Chartwell should enjoy strong pricing power.

It just delivered a quarter with 24% revenue growth and 35% funds from operations per unit growth. It also announced a 2% distribution increase, the first increase in several years. With operations normalized coming out of the pandemic, a permanent dividend growth trajectory seems reasonable.

This stock is a great bet for modest income and exposure to a long tailwind of growth.

The Foolish takeaway

When you are investing in your TFSA, focus on business quality over dividend yield. Look for stocks that can both grow and pay a growing dividend. You want to both preserve and grow your capital and enjoy a rising income stream over time.

The post How to Make Money in a TFSA With Dividend Stocks appeared first on The Motley Fool Canada.

More reading

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• The Surprising Reason Boring Utility Stocks Are Worth a Second Look Right Now
• The Best $10,000 TFSA Approach for Canadian Investors
• My 2 Favourite Stocks for Monthly Passive Income
• 3 TSX Dividend Stocks That Retirees Might Want on Their Radar

Fool contributor Robin Brown has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

It has been 17 years since the tax-free savings account (TFSA) was rolled out in 2009, and by all accounts, the program has been a success. The average Canadian has deposited tens of thousands into his/her TFSA over the years and made substantial investment gains in the process.

So, there’s no doubt that TFSAs are popular. The question is whether they are making a real contribution to Canadians’ retirement savings. While the TFSA is widely used, it is still less popular than the RRSP, which often has employer-matching plans and other such institutional supports attached to it. The TFSA isn’t quite there yet. Still, the TFSA is a popular account for making investments, especially short-term trades.

So, it’s a natural thing to wonder how your TFSA compares to that of the average Canadian your age. If you’re 50 years old, then you’ve had some time to grow and compound your account. What’s your scorecard?

While your “position relative to the averages” is not something that determines how much you’ll actually need to retire, it is something you can ask on your way to figuring that out. With that in mind, here’s my best estimate of what the average Canadian has in his/her TFSA at age 50.

How to gauge what the average Canadian has in TFSAs

The easiest way to estimate what the average Canadian has in TFSAs at age 50 is to go off of Statistics Canada (StatCan) data. StatCan publishes lists of TFSA contributions and balances for the most recent year it has on file. Currently, that year is 2023. While StatCan doesn’t give exact TFSA estimates for every possible age, it does give estimates for age brackets. Using these tables, we can put together a range of estimates for adjacent age groups and come up with an estimate based on that.

What the average 50-year-old Canadian had in a TFSA in 2023

According to the most recent StatCan data, the average Canadian had something like $24,000–$27,000 in his/her TFSA in 2023. Here’s how I arrived at that.

According to StatCan’s 2025 data dump, the average TFSA balance in the 45 to 49 age range was $23,818, while the average for the 50–54 age range was $29,371. While we can’t assume that the annual amounts grow perfectly linearly and just take the exact middle value as the average, we can be reasonably confident that the average TFSA balance at age 50 was between $25,000 and $28,000 in 2023.

Investing in your TFSA

If you’re wondering how to increase your TFSA balance, I have one suggestion for you:

Take a look into index funds.

Take a fund like the Vanguard FTSE Canadian High Dividend Yield Index ETF (TSX:VDY). It’s a Canadian dividend-themed index fund built on high-yield dividend stocks. It tracks an index provided by FTSE, a reputable index publisher. It has 61 stocks, which is a reasonable amount of diversification (“not putting all your eggs in one basket”). Finally, it has a 16.5 P/E ratio and a 2.3 price-to-book ratio, indicating it’s a decent value. Overall, putting your money into a fund like VDY probably makes a lot more sense than chasing individual “hot” stocks in your TFSA.

The post What the Average Canadian TFSA Looks Like at Age 50 appeared first on The Motley Fool Canada.

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• Canadians: Here’s How Much You Need in Your TFSA to Retire

Fool contributor Andrew Button has no positions in the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Income investors are looking for regular income that’s reliable and growing. It’s a simple enough strategy, but investors may struggle to find the right dividend stocks in order to make this goal a reality. In this article, I’ll discuss two Canadian companies that have an impressive track record on both of these fronts and one that has a rapidly improving dividend profile and outlook.

Canadian Natural Resources – A 3.7% dividend yield

The price of oil continues to trade at around US $100. This has been extremely beneficial to oil stocks like Canadian Natural Resources Ltd. (TSX:CNQ).

Canadian Natural is one of Canada’s premier oil and gas companies with a strong asset base. This asset base has resulted in significant long-life, low-decline production. In fact, the company’s assets have a life of more than 40 years with minimal capital investment.

What this means is that Canadian Natural Resources stock is an extremely profitable, relatively low-risk oil and gas stock with strong returns. And this has translated into strong and reliable dividends for income investors. In fact, CNQ stock has 26 consecutive years of dividend growth under its belt – with a compound annual growth rate (CAGR) of 20% over that time.

Canadian Natural Resources stock continues to increase its dividend payout and is currently yielding a generous 3.7%.

Fortis – A 3.2% dividend yield

Fortis Inc. (TSX:FTS) is another Canadian company that has a long history of strong shareholder returns and consistently rising dividends. As a utility company that receives the benefit of regulated revenues, Fortis stock is one of only a few companies as consistent and dependable.

This utility stock is one of North America’s leading utility companies, with nine regulated utilities in Canada, the U.S., and the Caribbean. It’s a low-risk business that benefits from stable cash flows and earnings due to its regulated nature. In good and bad economies, Fortis maintains its predictable and resilient revenue and earnings profile.

In the last 51 years, Fortis stock has increased its dividend annually. Today, Fortis stock is yielding 3.3%, amidst a rising demand environment for utilities, driven by a rising North American population. We can expect dividend growth of between 4% to 6% through 2030.

Altagas – A 2.5% dividend yield

Altagas Ltd. (TSX:ALA) operates in two segments – utilities and midstream. These segments each have their own growth and risk profiles, making Altagas a well-diversified, stable opportunity for investors.

The utilities segment is Altagas’ defensive segment, benefiting from stable, regulated revenues. Its midstream segment is the segment that’s rapidly growing, as liquified petroleum exports such as butane and propane are in high demand globally. Global energy needs are growing. North American infrastructure to support these global needs is also growing. And Altagas is a big part of this.

All of this is supporting Altagas’ dividend payments to its shareholders. In its most recent quarter, Q1 2026, the company increased its annual dividend per share by 6% to $1.34. Altagas stock is currently yielding 2.5%.

The bottom line

The Canadian companies discussed in this article are all very well-suited for income investors, as they continue to provide reliable and growing dividends.

These companies are benefiting from the rise in energy needs both domestically and globally. This is a long-term, secular trend that has staying power. As such, I believe that these stocks have a strong runway of long-term growth ahead of them.

The post Income Investors: These Canadian Companies Are Raising Payouts Again appeared first on The Motley Fool Canada.

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• How to Build a 2026 TFSA Strategy That Generates Monthly Cash

Fool contributor Karen Thomas has positions in AltaGas. The Motley Fool recommends Canadian Natural Resources and Fortis. The Motley Fool has a disclosure policy.

For many investors, the idea of generating monthly cash flow inside a TFSA is incredibly appealing. And it makes sense because as contribution room has grown over the years, TFSAs have become large enough to generate meaningful income, especially when built up over time.

However, one of the most common mistakes is assuming that building passive income means trying to find the stocks with the highest yields available.

In reality, a more practical approach is much simpler. Instead of focusing on yield, which only tells you the income today, it’s far better to focus on building a portfolio of reliable businesses that generate steady income, with enough stability and long-term growth potential to keep that income sustainable.

That’s why a balanced TFSA income strategy should focus on stability, dependable payouts, and some long-term growth.

Now, you can sometimes find all those features in a single stock. But more often, building that kind of balance requires combining multiple stocks so your overall portfolio reflects that strategy.

For example, companies like South Bow (TSX:SOBO), CT REIT (TSX:CRT.UN), and Brookfield Asset Management (TSX:BAM) are three high-quality examples of stocks that can each play a role in your TFSA.

How to build a foundation of dependable income

If your goal is to generate steady income each month, the foundation of your TFSA should be built around businesses that produce reliable and predictable earnings.

South Bow is a great example because it operates energy infrastructure assets that generate steady, fee-based revenue, often supported by long-term contracts.

These assets are essential to the economy, and that combination of structure and demand helps provide consistent income, even when broader market conditions are uncertain.

So not only does it generate predictable cash flow that supports its dividend, but it also offers an attractive yield of roughly 5.3%, along with stable long-term growth potential, making it an ideal stock for the foundation of your TFSA.

Meanwhile, CT REIT is a retail REIT tied to Canadian Tire. In fact, the retailer is both its majority shareholder and by far its largest tenant, and that relationship helps provide stable, predictable rental income, which is why it’s such a reliable stock to own.

That’s important because CT REIT doesn’t just offer a reliable and attractive yield, currently at 5.3%; it’s also a consistent dividend growth stock.

For example, since going public just over a decade ago, it has increased its distribution every year, which is exactly the kind of consistency many TFSA investors are looking for.

So, between South Bow’s infrastructure-driven income and CT REIT’s steady rental streams, you’re building a base of dependable cash flow that doesn’t rely on perfect market conditions.

Long-term growth still matters in your TFSA

While stable income is important, a strong TFSA strategy should always have some degree of growth built in. Because if the underlying businesses you own aren’t growing, the income they generate can slowly be eroded by inflation and lose its impact over time.

So, while South Bow and CT REIT both offer growth potential themselves, adding a stock with even more long-term upside, often in exchange for a slightly lower yield, can help strengthen the overall portfolio.

Brookfield Asset Management is a great example for TFSA investors because its business model is less capital-intensive than owning assets directly, which gives it more flexibility to scale over time.

For example, it generates fee-based earnings by managing capital for investors globally, and as demand for infrastructure, renewable energy, and alternative assets continues to grow, Brookfield is positioned to benefit.

That allows the company to continue expanding its earnings, supporting both its dividend and long-term compounding potential. And right now, Brookfield offers a yield of roughly 4.1%.

So, while the yield is still attractive, Brookfield’s main role is to boost the long-term growth potential of the portfolio.

And by combining stocks with different payout schedules, including monthly payers like CT REIT, you can build a TFSA that generates consistent cash flow throughout the year.

Because ultimately, building monthly income in a TFSA shouldn’t be just about trying to generate the most income today, it’s about owning a mix of reliable businesses that can generate and grow that income over time.

The post A Practical Way to Use Your TFSA Contribution Room to Build Monthly Cash Flow appeared first on The Motley Fool Canada.

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Fool contributor Daniel Da Costa has positions in Brookfield Asset Management. The Motley Fool recommends Brookfield Asset Management. The Motley Fool has a disclosure policy.

Here is the bottom line on Kits Eyecare (TSX:KITS): the stock is down roughly 50% from its peak, and that gap between price and performance is what makes it worth your attention right now.

Kits wrapped up its 14^th consecutive quarter of organic revenue growth above 20%. Valued at a market cap of $368 million, Kits is a compounding machine hiding behind a beaten-down stock price, making it attractive to long-term investors.

Kits Eyecare is growing at a category-leading pace

Total revenue in Q1 rose 23% year over year to $57.5 million. Compared to Q4, the top-line grew by $3.6 million or 7%.  

Glasses revenue jumped 61% year-over-year to $10.8 million. The company delivered over 156,000 pairs of glasses in Q1, a 50% increase from the same period a year ago.

Premium lens upgrades now account for 42% of glasses revenue. Digital progressive lenses grew by over 65% year over year. And the average order value for glasses is roughly 35% higher than it was a year ago.

Chief Executive Officer Roger Hardy put it plainly on the company’s Q1 2026 earnings call: “Glasses are transitioning from a growth vector to a core driver of both revenue and margin.”

One of the most underappreciated parts of the Kits story is how sticky its customers are.

• Repeat customers represented 63.9% of total revenue in Q1.
• That figure has remained above 60% in every quarter since the company went public in January 2021.
• Nearly two-thirds of every dollar Kits earns comes from people who have already bought from the company and came back on their own.
• Customers in the 2021 contact lens cohort grew from roughly $151 in year-one revenue per customer to over $450 in cumulative revenue over four years. And the newer cohorts are starting even higher.
• The 2026 glasses cohort is generating first-order revenue approximately 62% higher than that of the 2025 cohort, which entered at the same price point.

That means the platform is compounding, and each new batch of customers is worth more than the last.

The bull case for the TSX stock

Kits ended Q1 with $19 million in cash and no long-term debt. The company repaid its full $10 million credit line at the start of the year and also has a $15 million undrawn facility with Bank of Montreal.

Adjusted EBITDA came in at $4.1 million, or 7.2% of revenue, the highest adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) in company history. It was also the 14th consecutive quarter of positive adjusted EBITDA.

The gross margin expanded to 40.9% in Q1, though $2.1 million of that was attributable to a one-time tariff refund. Strip that out, and the underlying gross margin was still over 37%, which is a year-over-year improvement on its own.

Management expects gross margins to exceed 50% in the coming years as glasses become a larger share of total revenue.

For Q2, Kits guided for revenue between $57 million and $59 million, with adjusted EBITDA margins of 3% to 5%. For the full year, management targets constant-currency growth of 25% to 30%.

Is KITS stock undervalued?

Stock prices and business fundamentals can diverge for extended periods, especially for small- and mid-cap companies. Kits is a clear example, given that the TSX stock is down 50% from all-time highs. Alternatively, the business continues to grow profitability while expanding profit margins and widening the customer base.

Its vertically integrated manufacturing lab in Vancouver gives Kits a cost advantage that traditional optical retailers cannot match.

Its artificial intelligence-powered OpticianAI tool is increasing conversion rates and driving customers toward higher-value lens options. Revenue per employee has grown from roughly $600,000 to approximately $1 million, a sign the business is scaling efficiently.

Analysts tracking the TSX stock forecast adjusted earnings to expand from $0.12 per share in 2025 to $1.01 per share in 2030. If KITS stock is priced at 20 times forward earnings, which is reasonable, it could double within the next four years.

The post This Canadian Stock Is Down 50% and Nearly Perfect for Long-Term Investors appeared first on The Motley Fool Canada.

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Fool contributor Aditya Raghunath has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Kits Eyecare. The Motley Fool has a disclosure policy.

Canadian passive-income seekers looking to find a high-yielding dividend stock that deposits cash into their brokerage accounts every single month may wish to check out True North Commercial Real Estate Investment Trust (TSX:TNT.UN), or True North REIT.

After suspending its distributions during a turbulent 2023 for office real estate, this pure-play Canadian office REIT made a major comeback by reinstating its monthly payouts in early 2025. Today, its well-covered payout sports a juicy 8.4% annual dividend yield. But is this high-yield REIT a safe bet for your portfolio in May 2026? Let’s take a closer look.

True North REIT: The rebirth of a high-yield passive income stream

True North Commercial REIT’s reinstated monthly distribution promises a reliable, well-covered high-yield passive income payout that could help compound investors’ wealth.

The office REIT owns a portfolio of 37 office properties spanning 4.4 million square feet of gross leasable area (GLA) located across five provinces. While it has some notable concentration of 41.6% of its GLA in the Greater Toronto Area (GTA), the trust’s properties are reasonably diversified across Canada, and it has maintained resilient occupancy levels post-pandemic.

Although overall occupancy rates experienced a dip later in the past year, falling from 92% by March 2025 down to 90% by December, the REIT’s core portfolio boasted a stellar 95% occupancy rate as of March 31, 2025, excluding properties held for sale. To optimize its portfolio, True North has disposed of three properties since the first quarter of 2025, including an Ottawa property held for sale that was vacated in the fourth quarter of 2025.

Crucially, the Canadian national office market continues to trend positively, marking two straight years of positive net absorption and ending 2025 with 2.2 million square feet of net absorption nationally. True North is capitalizing on this leasing momentum, renewing and signing leases at average rates 5% above expiring rents during the first quarter, with tenants locking in a long average lease term of 6.9 years.

An unprecedented safety net

When a dividend stock yields over 7%, the first question investors should ask is whether the high-yield passive income payout is reasonably safe. For True North, the answer lies in its jaw-dropping distribution coverage, with its diluted Adjusted Funds From Operations (AFFO) payout rate sitting at an incredibly conservative 38% for the first quarter of 2026. AFFO measures the most recurring distributable cash flow for REITs, after considering property maintenance and leasing costs.

During the first quarter of 2026, the REIT paid out $2.5 million in distributions while generating $7.3 million in adjusted cash flow from operating activities. It had the capacity to pay more than double its current distribution, proving that the payout is exceptionally well covered by rental cash flows. Furthermore, the REIT’s underlying cash flow is backed by institutional-grade tenants: about 74% are either government tenants (36%) or credit-rated corporate tenants (38%), presenting an exceptionally low default risk.

A deeply undervalued real estate investment trading at 32 cents on the dollar

Perhaps the most compelling reason to consider True North REIT is its wildly high discount to net asset value (NAV). As of March 31, 2026, True North units had an NAV of $26.10, yet the same units exchanged hands at around $8.19 in the public stock market at writing.

Deeply undervalued TNT.UN units trade at a staggering 68.6% discount to their fair value, allowing new investors to buy quality real estate at 32 cents to the dollar. Management has also renewed a unit repurchase authorization that allows it to buy back up to 10% of its outstanding equity units at these heavily discounted prices to create long-term value.

Investor takeaway

True North REIT’s 8.4% high yield monthly payout is a compelling offering for passive income purposes. However, the deep discount on units implies above-average risks. The market is skeptical of the office market since the pandemic, and a recovery is not yet convincing as the Canadian economy shrugs off recessionary pressures.

That said, because regulation requires REITs to distribute most of their earnings to unit holders so they can remain income tax-exempt, the high yield distribution remains a core focus. With an 8.4% yield, an ultra-safe payout ratio, and a massive valuation discount, this monthly cash-payer is well worth a look for passive income seekers today.

The post This 8.4% Dividend Stock Pays Cash Every Single Month appeared first on The Motley Fool Canada.

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Fool contributor Brian Paradza has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

It can be tricky to try to catch a bottom in a fallen stock. Catching a knife isn’t without its fair share of risks. But, then again, performance chasing can also be a high-risk proposition once the tides do turn. If the technical picture looks right, the price of admission entails a deep discount to intrinsic value (or your estimate of it), the fundamentals are still strong, and investors just love to hate a certain name, you might have a timely opportunity to go against the grain.

Just be patient and don’t expect a comeback to happen immediately after you’ve hit the buy button. Deep value investors know that it can take months, even quarters, or more than a year for a turnaround plan to finally work its way into a stock.

Strategic turnarounds take time, and investors should adopt more of a long-term horizon when it comes to the stocks that have fallen by so much that nobody else seems nearly as willing to want to own them, despite any positive changes that have gone on behind the scenes. Indeed, pay extra attention to the conference calls and any signs of earnings progress as a firm under pressure looks to find the means to bottom out and start marching higher again.

Spin Master

In this piece, we’ll look at a ridiculously oversold mid-cap name with a $1.8 billion market cap that might be a worthwhile value option for those with strong enough stomachs. Enter shares of toymaker Spin Master (TSX:TOY), which have been in a whirlwind of pain in recent years.

The stock is down close to 68% from its highs, not seen since the first half of 2018. Indeed, that was a long time ago, and there have been some very painful spills along the way.

With shares continuing to gravitate lower with no signs the name can hang onto any near-term moves higher, questions linger as to whether or not Spin Master’s problems are fixable. Of course, you simply cannot fault the company itself for the performance, especially considering the state of the industry, the impact of external factors (think tariffs), higher energy (and transport) costs and all the sort.

A lot has gone wrong, but that negativity has already worked its way into the valuation. And, in my humble opinion, I think the stock is now oversold enough to consider interesting for investors seeking deep value. Of course, the name is rather untimely and could continue to be for some time. Sales have not been on the right track.

Though it’s hard to know when consumers will have more discretionary income to start buying Spin’s toys again, I do think that the firm could realize margin gains as it licenses its impressive brands (think PAW Patrol) while investing in digital games. Add the robust portfolio and M&A potential, and I’m inclined to view Spin Master stock as trading at a huge discount.

Bottom line

Sure, the consumer is under pressure, but when the tides turn, I’d look for TOY to make up for lost time as its prior investments look to start really paying off. In short, TOY stock is priced as though nothing can go right. At 10.5 times forward price-to-earnings (P/E), the name is just way too cheap to ignore, especially as management does its best to right the ship, even against industry headwinds.

The post It’s Time to Buy 1 Oversold TSX Stock Poised for a Comeback appeared first on The Motley Fool Canada.

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• 3 Top TSX Stocks to Buy if You Want Stability and Growth

Fool contributor Joey Frenette has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.