Written by Andrew Walker at The Motley Fool Canada
Retirees and other self-directed Tax-Free Savings Account (TFSA) dividend investors are looking for good TSX stocks that can provide steady income while riding out volatile market conditions.
Enbridge (TSX:ENB) trades near $62.50 at the time of writing. That’s not far off the 2025 high of around $65. The stock is up about 28% in the past year.
Enbridge is a major player in the North American energy infrastructure industry. The company moves about 30% of the oil produced in Canada and the United States. Its natural gas transmission network carries roughly 20% of the natural gas used by American homes and businesses.
Enbridge’s US$14 billion purchase of three natural gas utilities in the United States in 2024 made Enbridge the largest operator of natural gas utilities in North America. These assets, along with the gas storage and transmission network, put Enbridge in a good position to benefit from anticipated growth in natural gas demand in the coming years as gas-fired power generation facilities are built to provide electricity for artifical intelligence data centres.
Enbridge’s other investments in recent years include the purchase of an oil export terminal in Texas, and the acquisition of a stake in the Woodfibre liquified natural gas (LNG) export facility being built in British Columbia. The company also bought a wind and solar developer to bulk up its renewable energy portfolio.
Enbridge’s current capital program of $26 billion will help boost adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) by 7% to 9% through 2026. Distributable cash flow is projected to rise at a rate of 3%. This should support steady dividend growth. Enbridge has increased the distribution annually for the past 30 years.
Fortis (TSX:FTS) is up 24% in the past 12 months. The stock currently trades near its 12-month high.
Fortis is another natural gas utility operator. The rest of the portfolio includes power generation facilities and electricity transmission networks in Canada, the United States, and the Caribbean. Fortis gets nearly all of its revenue from rate-regulated businesses. This means cash flow tends to be predictable and reliable, which makes it easier for management to plan capital investments and dividend increases.
Like Enbridge, Fortis is working on a $26 billion capital program. Acquisitions have historically been part of the growth plan, as well, although Fortis hasn’t made a major purchase for several years. The company expects the rate base to rise from $39 billion in 2024 to $53 billion in 2029. As the new assets go into service, revenue and cash flow expansion should support planned annual dividend increases of 4% to 6% over five years. This is good guidance for dividend investors in the current uncertain market conditions.
