TFSA Investors: 3 “Perfect” Stocks to Buy for Reliable Dividends

Canadian Natural Resources Ltd. (TSX:CNQ)(NYSE:CNQ) and two other popular stocks represent some of the best TFSA investments.

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The following three stocks are just right for a TFSA, bringing a blend of good value and high dividends. Let’s look at the stats and outlook for this trio of tickers perfectly suited for a long-term investor looking to pad a tax-free savings account.

Canadian Natural Resources (TSX:CNQ)(NYSE:CNQ)

Down 7.2% in the course of the last five days, Canadian Natural Resources stock is going cheap after the company cut its Albian mines output forecasts for the next couple of months. However, it’s making up for it by optimizing other resources – so does that make it a top TFSA-filler to buy on the dip?

While a one-year past earnings growth of 8.1% beats a slightly negative five-year average past earnings growth rate by a somewhat narrow margin, the long-term passive income investor bullish on natural resources will find Canadian Natural Resources’ decent dividend yield of 3.97% to be reason enough to buy.

For would-be investors interested in buying Canadian Natural Resources stock, you may want to forget about that revised future output and focus on a 14.9% expected annual growth in earnings. Meanwhile, debt at 64.5% of net worth isn’t too much of a worry at this point, though it does denote a balance sheet that the low risk investor may look upon as less than satisfactory, especially in conjunction with recent news.

Enbridge (TSX:ENB)(NYSE:ENB)

A slightly negative one-year past earnings growth rate denotes a tough year for energy stocks; while that may come as no surprise, a five-year average past earnings growth of 33% shows that Enbridge can pull it out of the bag under better conditions. Indeed, Enbridge’s returns of 21.1% over the past year easily beat the oil and gas industry average for the same 12 months (which was itself negative by 3.4%).

While a 32% discount off of the future cash flow value suggests that Enbridge might be a solid buy for a value-focused portfolio, RRSP, or tax-free savings account, a P/E of 33.5 times earnings tells a different story. At around double the average for a Canadian oil and gas stock, that price-to-earnings ratio is slightly off-putting; however, Enbridge stock is trading near the market in terms of book value.

BCE (TSX:BCE)(NYSE:BCE)

BCE’s returns of 12.1% in the past year narrowly beat the Canadian telecoms industry average of 9.1% for the same period. Its earnings growth has been negative for the past year, not unlike Enbridge’s, though BCE’s five-year average past earnings growth of 6.6% is considerably lower than that stock’s earnings growth.

Decent valuation matched with a chunky dividend are the main draw for this top-tier Canadian telecoms ticker, with a P/E of 19.3 times earnings denoting the former and a yield of 5.3% illustrating the latter. Though a 6.2% expected annual growth in earnings may be on the low side, it shows growth in a crowded field at the very least, which makes that passive income taste even more palatable.

The bottom line

Buy Enbridge for its high dividend yield of 6.04% and 36.5% expected annual growth in earnings, or go for Canadian Natural Resources, with its P/E of 17.8 times earnings and P/B of 1.4 times book indicating near-perfect valuation. BCE, meanwhile, remains one of the front-line communications and media stock on the TSX index and a fairly sturdy long-term investment.

Should you invest $1,000 in Royal Bank of Canada right now?

Before you buy stock in Royal Bank of Canada, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Royal Bank of Canada wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $20,697.16!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 29 percentage points since 2013*.

See the Top Stocks * Returns as of 3/20/25

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Victoria Hetherington has no position in any of the stocks mentioned. The Motley Fool owns shares of Enbridge. Enbridge and CN are recommendations of Stock Advisor Canada.

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Dividend Stocks

A worker gives a business presentation.
Dividend Stocks

3 Stocks I’d Buy With $10,000 Whenever They Dip in Price

Buying the dip in the right TSX stocks can help you leverage a market downturn and accelerate your long-term wealth…

Read more »

Hourglass and stock price chart
Dividend Stocks

Where I’d Put $50,000 Right Away in Top Canadian Stocks for Growth and Income

TSX dividend stocks such as Savaria and CNQ are top choices for investors looking for growth and income in 2025.

Read more »

Super sized rock trucks take a load of platinum rich rock into the crusher.
Dividend Stocks

Invest $25,000 in This Dividend Stock for $536.90 in Annual Passive Income

This dividend stock is one of the best options for those looking to create income long term.

Read more »

A worker overlooks an oil refinery plant.
Dividend Stocks

Where I’d Put $10,000 in Top Canadian Energy Stocks This April for Dividend Income

These three energy stocks are ideal for income-seeking investors, given their solid cash flows and consistent dividend growth.

Read more »

An investor uses a tablet
Dividend Stocks

This Could Be the Top Canadian Dividend Stock to Buy Right Now

Here's why I think Enbridge (TSX:ENB) remains a top option for dividend investors in this current macroeconomic climate.

Read more »

senior man smiles next to a light-filled window
Dividend Stocks

How I’d Invest My $7,000 TFSA Across These 3 Canadian Stocks for Dividend Income

Investors looking for Canadian stocks for dividend income that can last decades should consider buying these three stocks today.

Read more »

A worker uses a double monitor computer screen in an office.
Dividend Stocks

National Bank vs. Bank of Montreal: How I’d Divide $12,000 Between Banking Stocks

Here's how I would think about splitting up a $12,000 prospective investment in National Bank of Canada (TSX:NA) and Bank…

Read more »

A train passes Morant's curve in Banff National Park in the Canadian Rockies.
Dividend Stocks

Canadian National Railway: How I’d Approach This Blue-Chip With $10,000 in 2025

Despite current macro headwinds, Canadian National Railway remains a rock solid, blue-chip pick for long-term investing.

Read more »