The dream of by no means worrying about cash once more would possibly really feel far-fetched, however with the correct mix of Canadian dividend shares, it’s not as wild because it sounds. Whereas many Canadians chase scorching progress shares or get caught sitting on money, there’s a center path: regular, predictable earnings that grows over time. If I had $250,000 to spend money on my TFSA, I’d cut up it throughout three firms that mix reliable earnings with long-term energy: Royal Financial institution of Canada (TSX:RY), Toronto-Dominion Financial institution (TSX:TD), and TELUS (Tsx:t). Let’s get into why.
RBC
Let’s begin with Royal Financial institution of Canada, the most important financial institution within the nation. It lately posted second-quarter outcomes, with internet earnings of $4.4 billion, up 11% yr over yr. Adjusted earnings got here in at $3.12 per share, additionally up 7%. The dividend was bumped up by 4% to $1.54 per share quarterly. That’s a strong 3.4% annual yield, and the financial institution continues to develop regardless of financial headwinds.
Sure, provisions for credit score losses rose, with whole provisions for credit score losses (PCL) hitting $1.4 billion. However the dividend inventory nonetheless boasts a CET1 capital ratio of 13.2%, comfortably above regulatory minimums. It’s additionally planning to purchase again as much as 35 million shares. That sort of capital return ought to enchantment to long-term traders. RBC’s sturdy private and business banking divisions and up to date HSBC Canada integration proceed to generate pre-tax earnings progress, up 19% this quarter. It’s a basis dividend inventory, good for constructing earnings.
TD Financial institution
Subsequent, I’d look to TD Financial institution. Its second-quarter earnings got here out earlier this yr, and TD has traditionally provided a barely greater yield than Royal whereas sustaining an identical stage of security. As of now, the inventory yields round 4.1%, paying $1.05 quarterly per share. TD additionally stands out for its U.S. publicity, particularly in retail banking. This offers it progress potential because the U.S. financial system rebounds, and that might translate into dividend hikes over time.
The dividend inventory has lagged lately, buying and selling at a decrease valuation than its friends as a result of regulatory noise and credit score considerations within the U.S., however that might be a chance. For a long-term TFSA investor, shopping for when sentiment is cautious typically pays off. With rates of interest stabilizing, TD is positioned to continue to grow its mortgage e-book whereas managing danger prudently. It’s not as flashy as some tech shares, however TD is reliable.
TELUS
Now for TELUS. Whereas telecoms have been beneath stress as a result of greater debt prices and capital expenditure (capex) burdens, this dividend inventory is bucking the pattern. It lately reported first-quarter 2025 outcomes displaying free money circulate progress of twenty-two%, with money from operations up 13%. T inventory raised its quarterly dividend to $0.4163, representing an annual yield of about 7.4%. That’s not a typo, over 7%!
The dividend inventory additionally reaffirmed its plan to develop dividends by 3% to eight% yearly by means of 2028. That’s uncommon in at this time’s market. Telus continues to develop its cell and stuck buyer base, including 218,000 prospects final quarter, its strongest Q1 ever. What makes TELUS much more fascinating is its well being section. Telus Well being posted 12% income progress and 30% adjusted earnings earlier than curiosity, taxes, depreciation and amortization (EBITDA) progress. It’s additionally increasing globally with its acquisition of Office Choices. So whereas some see a utility-style inventory, TELUS is morphing into one thing broader, with steady earnings and publicity to well being and tech.
Backside line
If I have been placing $250,000 to work, I’d go together with $100,000 in Royal Financial institution, $100,000 in TD, and $50,000 in TELUS. That unfold presents stability between two conservative financials and one high-yield telecom. At at this time’s dividend charges, that might generate about $11,186 per yr in tax-free earnings yearly! And that’s earlier than any dividend will increase, which all three dividend shares have an extended observe file of delivering.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| RY | $181.50 | 551 | $6.16 | $3,393.76 | Quarterly | $99,976.50 |
| TD | $102.00 | 980 | $4.20 | $4,116.00 | Quarterly | $99,960.00 |
| T | $22.70 | 2,202 | $1.67 | $3,677.34 | Quarterly | $49,985.40 |
Might these shares fall within the brief time period? Certain. Market corrections occur. However these dividend shares have weathered recessions, price hikes, and regulatory modifications earlier than. The companies are important, dividends are coated by earnings, and every have progress levers past Canada.