TSX stocks with a strong history of dividend growth, high yields, and reliable payouts are excellent choices for generating stress-free passive income. The payouts of these dividend stocks are supported by a growing earnings base and solid cash flows. Besides solid fundamentals, these companies have visibility over future income and distributions, thus adding stability to your portfolio and generating dependable income in all market conditions.
Moreover, Canadians can use the TFSA (Tax-Free Savings Account) to generate tax-free dividends and enhance the portfolio’s passive-income potential. The TFSA contribution limit for 2025 is $7,000.
Against this background, here is a top Canadian dividend stock that could generate $414/year in passive income with a $7,000 investment.
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The top dividend stock with about 5.9% yield
With a solid dividend growth history, high yield, and reliable payouts, Enbridge (TSX:ENB) is a top option for generating steady passive income in all market conditions.
The integrated energy infrastructure company operates a diversified portfolio, including liquid pipelines transporting and exporting oil and other liquid hydrocarbons. It also has significant investments in natural gas pipelines, gathering and processing facilities, and a Gas Distribution and Storage segment focused on natural gas utility operations.
Additionally, Enbridge is engaged in renewable power generation, positioning it well to benefit from the growing demand for both traditional and green energy sources.
Enbridge’s assets generate high-quality cash flow and predictable growth, supporting its dividend payments. Thanks to its growing earnings and cash flows, Enbridge increased its dividend for 30 consecutive years, making it a Dividend Aristocrat.
Currently, Enbridge stock offers a quarterly per-share dividend of $0.943. This reflects an attractive annualized yield of about 5.9%. The company’s sustainable earnings, compelling yield, and visibility over future payouts make it a top stock for generating passive income.
Enbridge to grow its dividend
Enbridge’s assets are supported by long-term contracts, regulated cost-of-service tolling frameworks, and power-purchase agreements (PPAs). These low-risk commercial arrangements provide the company with a stable and predictable stream of distributable cash flow (DCF), regardless of market or commodity cycles. This resilience enables Enbridge to enhance its shareholder value through higher dividend payments.
Enbridge’s liquid pipelines business is poised for continued growth. The combination of mainline toll escalators, secured growth projects, and higher system utilization will drive revenue and cash flow growth in this segment. Additionally, the company’s gas transmission and midstream operations benefit from a highly contracted system that serves demand-pull markets, further enhancing cash flow stability.
Enbridge’s diversified utility assets will also contribute to its financials. These assets generate steady and reliable growth, providing a cushion against market volatility. Moreover, the recent acquisition of three U.S. gas utilities is set to expand the company’s low-risk earnings base.
The renewable power segment is another bright spot, with growing demand signalling strong potential for future expansion. This segment complements Enbridge’s traditional energy infrastructure, aligning the company with the global transition to cleaner energy sources.
Earn $414 in passive income
Enbridge’s diversified asset portfolio, highly predictable cash flow, strong balance sheet, and strategic acquisitions position the company for sustainable growth. These strengths will likely increase DCF per share, supporting continued dividend growth.
The table indicates that a $7,000 investment in Enbridge stock within a TFSA will provide a tax-free quarterly income of $103.73, amounting to $414.92 per year.
| Company | Recent Price | Number of Shares | Dividend | Total Payout | Frequency |
| Enbridge | $63.50 | 110 | $0.943 | $103.73 | Quarterly |
