The perfect Tax-Free Savings Account (TFSA) stock shouldn’t need fireworks. I’d rather have regular cash hitting the account, a business capable of growing that income over time, and enough earnings growth to stop inflation from slowly eating the whole thing for lunch.

Mullen Group (TSX:MTL) comes surprisingly close.

Mullen’s $0.07 monthly dividend works out to $0.84 annually and a yield of roughly 3.2% at writing. That’s smaller than some of the TSX’s headline-grabbing yields, yet the combination of monthly payments and rapidly improving operating results makes it considerably more interesting.

Better TFSA payments

Interest, dividends, and capital gains earned inside a TFSA generally aren’t taxed. Withdrawals also don’t count as taxable income or affect federal income-tested benefits such as Old Age Security (OAS).

There’s another useful feature. Unused TFSA contribution room carries forward indefinitely, while withdrawals are generally added back to available room the following calendar year.

The 2026 annual TFSA limit is $7,000, although someone with accumulated unused room could contribute considerably more. Investors should check their own records before contributing, because CRA account information can lag behind recent transactions.

Once that housekeeping is finished, the fun part is deciding what to own.

Mullen: More than trucking

Mullen stock operates transportation and logistics businesses across Canada and the United States. Its companies handle less-than-truckload freight, warehousing, logistics, customs brokerage, specialized transportation, and services tied to energy and industrial activity.

Acquisitions have expanded that footprint further, including the addition of Cole Group’s Canadian operations. Yet the latest quarter wasn’t simply an acquisition story. Second-quarter revenue increased 12.6% to a record $609.3 million, while adjusted operating income before depreciation and amortization climbed 21.8% to $102.1 million. Adjusted earnings per share (EPS) nearly doubled to $0.41.

Margins improved as well, helped by Mullen stock deliberately walking away from lower-return freight and concentrating on better-paying customers. Personally, I like businesses willing to say no to bad revenue. Lots of sales aren’t particularly useful if you barely make money delivering them.

Management has now increased its 2026 capital program by $50 million as customer optimism improves, while leaving the door open to further acquisitions. That provides a useful growth catalyst among Canadian dividend stocks.

What $7,000 could produce

A $7,000 TFSA contribution would purchase 264 full shares at $26.50. That would put $6,996 to work and produce approximately $221.76 in annual dividend income, assuming the current payment remains unchanged. That averages about $18.48 every month.

The dividend has also been moving in the right direction. Mullen stock paid $0.04 per month in early 2021, increased that to $0.05 and eventually $0.06 in 2022, then raised it again to $0.07 in 2024. It has maintained that level through 2026. Reinvesting those payments could gradually add more shares, creating another layer of tax-free compounding.

Considerations

There are still risks to consider. Transportation is cyclical. A weaker economy can reduce freight volumes, while fuel prices, labour costs, and competition can squeeze margins.

Mullen stock also uses acquisitions to grow, creating integration risk and pushing total net debt to roughly $819 million. Still, adjusted net debt was about 1.8 times operating cash flow after accounting for cash, leaving the balance sheet in reasonable shape.

Valuation is the other wrinkle. Shares have nearly doubled from their 52-week low, so this isn’t an undiscovered clearance item. At roughly 24 times trailing earnings at writing, I’d be buying for continued earnings growth rather than expecting another instant rerating.

Bottom line

Mullen’s monthly dividend won’t make a $7,000 TFSA feel like early retirement next Tuesday. That’s probably a good thing.

The combination of record revenue, improving margins, rising earnings, a growing dividend history, and multiple transportation businesses creates something more useful: a stock that can potentially increase both its income and its value over time. For a TFSA investor, boring monthly cash with room to grow can look pretty dreamy.