Opening a Tax-Free Financial savings Account (TFSA) is one thing that buyers ought to do immediately in the event that they haven’t already. That’s as a result of, because the title suggests, any positive aspects generated in one among these accounts could be withdrawn tax free. That would enable you speed up your method to monetary independence. By investing in dividend shares, you might generate a big supply of tax-free passive earnings. In 2023, Canadians got $6,500 in contribution room for his or her TFSA.

On this article, I’ll focus on two high shares to purchase with that room.

This inventory has grown its dividend for practically 50 years

Relating to dividend shares, Fortis (TSX:FTS) tends to face out among the many pack. For those who aren’t acquainted, this firm supplies regulated gasoline and electrical utilities to greater than three million prospects throughout Canada, the US, and the Caribbean. As a result of utility firms are likely to function on a recurring income mannequin, firms like Fortis can make the most of a really predictable supply of earnings. That enables them to plan for dividend raises a few years upfront.

We will see Fortis placing this benefit to good use by its 49-year dividend-growth streak. If it’s not clear how spectacular that feat is, think about this: Fortis holds the second-longest lively dividend development streak in Canada. The truth that Fortis has been in a position to increase its dividend by way of the Nice Recession and the COVID-19 pandemic must be highlighted. Many stellar firms wanted to halt raises or droop dividends altogether due to these two occasions.

I strongly imagine Fortis might proceed to lift its dividend and, in flip, hold buyers joyful for years to come back. The corporate has already introduced that it’s going to increase its dividend at a price of 4-6% by way of to a minimum of 2027. With a ahead dividend yield of three.79%, Fortis inventory must be very engaging to buyers.

When unsure, go together with one of many banks

Dividend buyers also needs to be very keen on the Canadian banks. These firms have been distributing a dividend for a few years. Actually, some firms, like Financial institution of Nova Scotia (TSX:BNS), are developing on practically two centuries of continued dividend distributions. Financial institution of Nova Scotia, specifically, has been paying shareholders a dividend for 190 years.

Along with that robust dividend historical past, the Canadian banks are very stable companies. The Massive 5, specifically, have very robust moats. Mix that with a extremely regulated Canadian banking trade, and corporations like Financial institution of Nova Scotia begin to seem like they might stay as trade leaders for a really very long time.

Nonetheless Financial institution of Nova Scotia, we are able to see that the corporate has remained dedicated to rising internationally. This permits the corporate to broaden into new areas and construct on its spectacular North American enterprise. If its worldwide exploits show profitable, then that may very well be one other manner that Financial institution of Nova Scotia might assist its excellent dividend.