Should you invest $1,000 in Vanguard Ftse Canadian High Dividend Yield Index Etf right now?

Before you buy stock in Vanguard Ftse Canadian High Dividend Yield Index Etf, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Vanguard Ftse Canadian High Dividend Yield Index Etf wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $21,058.57!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 38 percentage points since 2013*.

See the Top Stocks * Returns as of 2/20/25

Buy These 3 Dividend Stocks to Create a Sizeable Passive-Income Stream

With the right dividend stocks in your TFSA, you can create a decent enough passive-income stream to take some of the load off your primary income.

| More on:

Do you want to save more money than what you are saving right now? There are a few ways you can go about it. You can start cutting down your necessary expenses/discretionary spending a little more brutally in order to save more. Or, you can increase your income. If more money is flowing into your pocket, you might be able to save more without adapting to a frugal lifestyle.

One of the best ways to increase your income is to create a passive-income stream. This won’t unnecessarily burden you, but it will save you time and effort and might still allow you to increase your savings. An affordable way to create a passive-income stream is buying dividend stocks in your TFSA. Let’s assume you have set aside $45,000 in your TFSA for a passive income.

An independent power-generation company

Capital Power (TSX:CPX) is an Edmonton-based power-generation company that relies on multiple energy sources to produce electricity. Right now, only 27% of its EBITDA comes from renewable energy sources, 43% from natural gas, and the rest from power plants that use both natural gas and coal. But the company is planning to go off coal by 2023.

Capital Power’s revenues depend upon the contracts and prices it lands with the distribution companies in the Alberta power market. The company has been slowly growing its revenue and performed well in 2020 as well. It offers a generous yield of 5.8% right now. If you invest $15,000 in the company, it will produce $72.5 a month for you in tax-free income.

A telecom company

Like the Canadian banking sector, the telecom sector is highly consolidated as well, and three companies cover the bulk of the market. Telus (TSX:T)(NYSE:TU) is one of those big three. The company has a decent variety of businesses and a significant number of subscribers in each business segment. It has over 10 million wireless subscribers and over two million internet subscribers.

The company looks well poised for growth in the 5G market. It might initiate the next phase of telecom growth, and not just for Telus, but for the other major telecom companies as well.

Telus has been growing its dividends for 17 consecutive years, and it’s currently offering a decent yield of 4.5%. At an investment of $15,000, Telus can offer you $56.25 a month.

A real estate aristocrat

SmartCentres REIT (TSX:SRU.UN) has been growing its dividends for the past six years. The REIT has a retail-focused portfolio of 167 properties. It has 3,400 different tenants, the most prominent of which is Walmart, which anchors 115 of SmartCentres properties. The company has about $10.7 billion in assets and a vision for the future: smart buildings that combine residential with commercial real estate assets.

SmartCentres has never been much of a capital growth prospect, but it has been generous with its dividends. It kept increasing its payouts, even when the payout ratios got painfully high, and the company seems unwilling to break its dividend-growth streak. At its current yield of 6.8%, it can convert a $15,000 investment into $85 a month.

Foolish takeaway

The monthly payout of the three companies combined comes out to about $213. It might not be enough to help you out with major expenses, but if you have a growth portfolio that offers 10% returns each year, the $2,556-a-year passive income can grow into a $465,000 nest egg in about three decades. You might be able to create an entirely separate nest egg with just your passive income by going into the right stocks.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends Smart REIT and TELUS CORPORATION.

More on Dividend Stocks

chart reflected in eyeglass lenses
Dividend Stocks

TFSA $7K: Where to Invest Right Now

TFSA users can invest their $7K annual limits in two profitable large-cap dividend stocks right now.

Read more »

Paper Canadian currency of various denominations
Dividend Stocks

6% Dividend Yield? Buy This Top-Notch Dividend Stock in Bulk!

This top-notch dividend stock offers a high and sustainable yield of about 6%, enabling you to generate resilient passive income.

Read more »

data analyze research
Dividend Stocks

2 High-Dividend TSX Stocks to Buy for Increasing Payouts

For big dividends with increasing payouts, look more closely at TD and CNQ today!

Read more »

Investor wonders if it's safe to buy stocks now
Dividend Stocks

Better Dividend Stock: TD vs. BCE

TSX dividend stocks such as TD and BCE offer shareholders a tasty dividend yield. But which blue-chip stock is a…

Read more »

Make a choice, path to success, sign
Dividend Stocks

Magna International: Buy, Sell, or Hold in 2025?

Magna International stock: A 5.5% dividend yield and a cheap 8.1 forward P/E – Can the automotive sector stock outrun…

Read more »

Senior uses a laptop computer
Dividend Stocks

Claiming a Home Office on Your 2024 Tax Return? Read This First

You may not be able to claim the home office tax credit, but you can claim the dividend tax credit…

Read more »

rail train
Dividend Stocks

Best Stock to Buy Right Now: CN Rail vs CP Rail?

Both these railway stocks have a strong future outlook, but which offers more value, and which more growth?

Read more »

Concept of multiple streams of income
Dividend Stocks

Here’s How Many Shares of Scotiabank You Should Own to Get $500 in Monthly Dividends

Scotiabank is a good income stock and it is reasonably valued today.

Read more »