Motley Fool investors should already know that creating passive income doesn’t have to be difficult. Nor does it have to be expensive. While there are certainly options out there to see incredible passive income come your way through investment, not all of the options are as easy as investing in the TSX today.
Let’s take real estate for example. If you were to invest in a property, you could make significant income every year. But on top of that comes a huge upfront cost and constant upgrades. And it’s also not guaranteed. You may not rent or sell the property, and then you’re stuck with bills instead of cash.
Instead, choosing passive-income stocks with a solid dividend yield can be not just an easy and cheap way to get in on passive income, it’s also practically guaranteed — especially if you go for these stocks on the TSX today with dividend yields above 5%.
1. A top pipeline producer
TC Energy (TSX:TRP)(NYSE:TRP) is an energy infrastructure company focusing on pipelines and storage. However, unlike some of its peers, it’s also involved with energy production as well, mainly through natural gas and nuclear energy. In fact, it’s been working through partnerships to start the move towards clean energy sources, including wind farms.
During the latest quarter, TC stock remained below net income from the same quarter in 2020, though comparable earnings increased by 16% year over year. Shares of the passive-income stock are up 30% year to date, and analysts predict another potential upside of around 8% during the next year. This could be fuelled by the investment into the clean energy sector.
As for the dividend, investors can pick up a dividend yield of 5.42% as of writing. That would create passive income of $1,079 from a $20,000 investment as of writing.
2. The largest market share of telecoms
BCE (TSX:BCE)(NYSE:BCE) holds the largest market share of the telecommunications business and is growing. The company continues to hold customers through its television, internet, and phone services, along with holding major entertainment brands in the television and radio sector. However, the company’s fibre network and 5G rollout is what should bring in significant revenue for passive-income investors.
Even with the boost from the pandemic, total revenue increased 71% year over year during the last quarter. Adjusted EBITDA improved by 28% as well. With the next quarter due Nov. 4, now is a time to watch this stock. Shares are up 22% year to date, but analysts currently believe there isn’t likely to be much more growth in the next year.
However, investors can still pick up the passive-income stock with a dividend yield of 5.52% as of writing. That would mean bringing in passive income of $1,100 per year from a $20,000 investment.
Foolish takeaway
If you’re looking to create a passive-income stream, you don’t necessarily have to make a huge investment. In fact, you don’t have to start even with $20,000. You can continue to build wealth year after year from these stocks. Each provides solid long-term options that will see your portfolio grow at a solid rate for decades to come.
