As 2025 draws to a close, investors are turning their attention to the coming year, strategizing how to position their Tax-Free Savings Account (TFSA) and Registered Retirement Savings Plan (RRSP) contributions for dividend income and long-term total returns.
With the TSX hovering near record highs, adding defensive stocks appears prudent. Meanwhile, contrarian picks that have underperformed in 2025 may be poised for a rebound should certain catalysts materialize next year.
Enbridge currently trades around $64 per share. The stock has seen a significant rally over the past two years, supported by falling interest rates which reduced its borrowing costs. The company utilizes debt to fund its growth initiatives, including acquisitions and development projects. Its outlook remains stable provided interest rates stay at current levels or decline further.
A recent pullback from its 2025 highs offers investors a chance to buy on a dip and lock in a solid dividend yield of approximately 6%. Enbridge is advancing a massive $35 billion capital program expected to drive roughly 5% growth in distributable cash flow beyond 2026, supporting continued dividend increases. The company recently raised its dividend by 3%, marking 31 consecutive years of annual dividend growth.
Canadian National Railway (CN) presents a potential contrarian opportunity. Trading near $135, the stock is down about 8% for 2025 and remains well below its early-2024 peak of around $180. Uncertainty surrounding Canada-U.S. trade negotiations forced CN to cut its 2025 guidance and effectively abandon its original 2026 outlook. While 2025 adjusted earnings will likely surpass 2024’s results, they are expected to fall short of management’s initial 10%-15% growth projection.
Investors may need patience, but the long-term upside is attractive. CN remains highly profitable and operates a strategically vital rail network connecting Canada’s Atlantic and Pacific coast ports with the U.S. Gulf Coast. A new trade agreement between the two nations could provide a significant tailwind. CN has increased its dividend annually for 29 years, with the current yield near 2.6%.
Fortis is the type of stock you can buy and hold for decades. The utility operates in Canada, the U.S., and the Caribbean, with assets spanning natural gas distribution, power generation, and electricity transmission. Demand for natural gas is projected to rise in coming years as gas-fired plants are built to power AI data centers, while broader grid upgrades are needed across North America to meet growing electricity demand.
In Canada, Fortis could play a role in the federal government’s envisioned national power grid under its new energy plan. Regardless, the company has a robust capital program of nearly $29 billion underway, set to significantly expand its rate base over the next five years. This should support annual dividend growth of 4-6% through at least 2030. Fortis has raised its dividend for an impressive 52 consecutive years.
Enbridge, CN, and Fortis all offer attractive and growing dividends. For investors with cash to deploy in a TFSA or RRSP, these stocks warrant a closer look. They provide a mix of defense, growth potential, and rebound opportunities, offering a diversified approach for 2026 portfolio planning.
