Picture opening your TFSA (Tax-Free Savings Account) statement after a decade. You notice the balance is significantly higher because of regular contributions and a diversified portfolio.
Moreover, any withdrawals from the registered account are exempt from Canada Revenue Agency taxes.
One way to turn this scenario into reality is to invest in quality dividend stocks such as Brookfield Infrastructure Partners (TSX: BIP.UN), which offered a yield of over 5% in October 2026.
Why a 5.1% dividend yield suits a TFSA
Brookfield Infrastructure Partners owns utilities, transport networks, pipelines and data assets. The majority of its cash flow is tied to inflation or long-term contracts, allowing it to generate steady income across market cycles.
CEO Sam Pollock told investors at the company’s Sept. 29 Investor Day that units yield more than 5%. He also pointed to a 65% payout ratio and about US$2.6 billion of liquidity, while credit ratings sit at BBB+, which is investment grade.
CFO David Krant added a number I like even more. Since 2009, distributions have grown for 17 straight years, averaging 9%.
Brookfield Infrastructure’s growth is speeding up again
Last year, management said growth was nearing an inflection point. Between 2023 and 2025, Brookfield grew its funds from operations by 7% annually. In 2026, it expects FFO to grow by 10% year over year. Historically, FFO growth for the Canadian dividend stock has been much higher at 14%.
In Q2, Brookfield reported an FFO of US$702 million or US$0.89 per unit, up 10% from the year-ago period.
The data segment saw a 36% jump in FFO, followed by midstream at 17%, transport at 7% and utilities at 5%.
How asset sales and AI infrastructure feed the next leg
In 2026, Brookfield generated US$1.4 billion from asset sales, excluding US$1.2 billion from the Csquare IPO. The company uses these proceeds to lower its debt profile and reinvest in other growth projects, both of which should increase future cash flows.
Brookfield recently expanded its Bloom Energy power framework from US$5 billion to US$25 billion. The U.S. Department of Energy also selected it to develop a Kentucky data campus designed for over 1.2 gigawatts of compute.
Management is careful about investment risk. “We remain focused on high-quality counterparties, strong contractual protections and disciplined underwriting,” Pollock told investors.
Pollock warned that AI contracts are “back end loaded, ” and Krant sees about $500 million a year going into AI over the next five years.
An organic project backlog of $6 billion also adds to top-line visibility.
Risks to weigh before buying BIP.UN in your TFSA
Few risks are associated with this investment. Local populations in several regions are pushing back on data centre construction.
Lief Williams, who leads AI factory efforts, said four U.S. states and over 300 counties have delayed permits or paused projects. Higher interest rates will also impact profit margins and future cash flows. Moreover, Pollock explained that the IPO window had likely closed for a while, which could slow down asset sales.
Then there is the structure change you need to evaluate. Unitholders vote this week to combine BIP and its sister shares (BIPC) into one corporation, expected to close in the fourth quarter.
Management says it should create a company worth about $30 billion with more than twice the trading liquidity. It could also open the door to index funds, driving valuations higher in the near term.
The Foolish takeaway
If you want a core income holding for your $7,000 of 2026 TFSA room, Brookfield Infrastructure deserves a close look. The TSX dividend stock has raised the annual payout from US$0.49 per share in 2010 to US$1.82 per share in 2026.
Over the last 10 years, BIP stock has returned 200% to shareholders, after adjusting for dividend reinvestments.
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