For investors steadily building wealth through a Tax-Free Savings Account (TFSA), dividend investing is undoubtedly a strategic focus. Dividend income provides a sense of stability amidst market volatility, and the long-term compounding effect can accumulate considerable gains. The key lies in selecting stocks with strong fundamentals, sustainable business models capable of paying dividends, and consistent growth potential.
Utilities and power producers typically fit this bill, as their long-term contracts and regulated assets often deliver stable cash flows. This article focuses on two high-quality Canadian dividend stocks that could serve as “golden picks” for TFSA investors seeking to secure long-term, reliable income.
Fortis (TSX:FTS) stands out as a quality dividend stock worth noting, thanks to its regulated utility model and long-term growth visibility. The company primarily operates electric and gas utilities in Canada, the U.S., and the Caribbean, providing essential services that remain indispensable throughout economic cycles.
Recently, Fortis stock traded around $74 per share, with a market capitalization of approximately $37.4 billion. Over the past year, driven by its solid operating strategy, its share price has risen nearly 19%. The company offers an annualized dividend yield of 3.6%, aligning well with the needs of a long-term TFSA income strategy.
Financially, Fortis continues to benefit from rate base expansion and prudent capital investments. In the third quarter of last year, its adjusted earnings per share were $0.87, showing growth compared to the same period the prior year. This was primarily driven by multiple utility rate increases and contributions from significant capital projects, with a strengthening U.S. dollar also providing a boost. Although costs related to asset dispositions created some short-term pressure, its core operations remained robust.
Looking ahead, Fortis recently announced a $28.8 billion capital plan for 2026-2030, which is expected to support a 7% annual growth in its rate base. The company also anticipates annual dividend growth of 4% to 6% through 2030. For TFSA investors seeking stable, growing income over decades, this combination of regulated growth and predictable dividends makes Fortis a “golden asset” within a TFSA portfolio.
If Fortis represents regulated stability, Capital Power (TSX:CPX) offers portfolio diversification potential for TFSA income through contracted power generation and growth-oriented cash flows. This Edmonton-based company owns and operates power generation and energy storage assets across North America, increasingly focusing on a flexible generation model supported by long-term agreements.
After a 12% share price increase over the past year, CPX recently traded near $58 per share, with a market cap of about $9.2 billion. The company offers an annualized dividend yield of 4.7%, which is attractive for income-focused TFSA investors.
In its latest quarter ending September 2025, Capital Power achieved adjusted EBITDA of $477 million and adjusted funds from operations of $369 million, primarily benefiting from higher contracted cash flows and solid operational performance.
Given these solid fundamentals, for investors seeking durable income backed by long-term contracts, Capital Power also holds the potential to become a “golden asset” within a TFSA.
