One of the easy ways to generate tax-free passive income is to put your Tax-Free Savings Account (TFSA) contribution room to work in top dividend stocks. The right investments can provide a growing stream of cash flow while allowing your dividends and capital gains to compound tax-free over time.
Fortunately, several Canadian companies have impressive records of consistently paying and increasing their dividends. While annual cash flow will vary with your portfolio’s yield and available contribution room, investors should focus on companies with resilient business models, robust cash generation, and disciplined capital allocation. These stocks are well-positioned to deliver dependable income and long-term dividend growth.
If you’re looking to build a steady stream of annual cash flow inside your TFSA, these two top TSX dividend stocks deserve a closer look.
Enbridge stock
Enbridge (TSX:ENB) is one of the best TSX dividend stocks to own in a TFSA for reliable annual cash flow. The energy infrastructure company has paid uninterrupted dividends for over seven decades and has increased its payout every year since 1995, making it a trusted choice for income investors.
Its extensive network of liquid pipelines connects major supply and demand zones and experiences high asset utilization. This enables the company to generate stable cash flows. Moreover, most of its EBITDA comes from regulated assets or long-term take-or-pay contracts. This business model reduces exposure to commodity price swings and supports consistent dividend growth. Enbridge also follows a disciplined payout policy, distributing 60%–70% of distributable cash flow (DCF) while retaining sufficient capital to fund growth and maintain financial flexibility.
Enbridge expects 2026 adjusted EBITDA of $20.2 billion to $20.8 billion, DCF per share of $5.70 to $6.10, and adjusted EPS growth of 4% to 6%. Over the longer term, management projects annual growth of about 5% in EBITDA, EPS, and DCF per share.
A $39 billion secured capital backlog, highly utilized pipeline assets, brownfield expansion projects, and investments in natural gas, utilities, and renewable power position Enbridge to benefit from rising energy demand. With its attractive yield, resilient cash flows, and strong growth outlook, Enbridge remains a compelling dividend stock to buy and hold for decades.
Toronto-Dominion Bank stock
Toronto-Dominion Bank (TSX:TD) remains one of the top Canadian dividend stocks to hold in a TFSA. Its resilient business, steady earnings, and consistent dividend growth make it a high-quality option for investors seeking reliable annual cash flow.
The bank has paid dividends for about 169 consecutive years and recently raised its quarterly dividend by 4% to $1.12 per share. Over the past decade, TD has grown its dividend at an annualized rate of 8%, supported by a strong earnings base. Its payout ratio of roughly 40% to 50% is sustainable, giving the bank room to reward shareholders while continuing to invest in growth.
TD’s outlook remains encouraging, driven by strength across its business segments. Its ability to drive loans and deposits, focus on operating efficiency, and maintain a strong balance sheet should support higher earnings over time. Further, its strategic acquisitions are likely to accelerate its growth and support steady dividend payments.
Overall, its diversified revenue streams and ability to deliver profitable growth position it well to deliver dependable income in the years ahead.
Generate over $757 in annual tax-free cash flow
Enbridge and Toronto-Dominion Bank rank among the most dependable dividend stocks for long-term TFSA investors. If you have approximately $20,000 in available TFSA contribution room, investing the full amount equally between these two dividend-paying stocks could generate more than $757 in annual tax-free cash flow, while also offering the potential for long-term capital appreciation.