The establishment of a consistent and sizable passive-income stream should be a goal for all long-term investors. Of course, there are many ways to make passive income. For example, a homeowner could establish a passive-income stream if they are able to collect rent from their property. Moreover, Canadians could theoretically make passive income if they write a successful e-book.
Today, I want to explore how to build a passive-income portfolio with some of the top dividend stocks on the TSX. In this scenario, I want to stash our dividend stocks in a Tax-Free Savings Account (TFSA). We will use about half of the total contribution room available: $44,000. Let’s dive in.
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Here’s the first stock I’d suggest to start our passive-income portfolio
Timbercreek Financial (TSX:TF) is a Toronto-based mortgage investment company that provides shorter-duration structured financing solutions to commercial real estate investors in Canada. Shares of this dividend stock have increased 1.2% month over month as of close on Wednesday, June 21. The stock is up 3.1% so far in 2023.
This company released its first-quarter fiscal 2023 earnings on May 8. Timbercreek achieved record net investment income of $32.7 million — up 44% compared to the first quarter of fiscal 2022. Meanwhile, it posted record net income of $18.1 million. The company took advantage of improved interest income and its strong mortgage portfolio.
Shares of Timbercreek closed at $7.52 per share on June 21. For our hypothetical, we can snatch up 1,940 shares of Timbercreek for a purchase price of $14,588.80. The stock currently offers a monthly dividend of $0.058 per share. That represents a superb 9.1% yield. This purchase will allow us to generate monthly passive income of $112.52 going forward.
This REIT can generate big passive income going forward
SmartCentres REIT (TSX:SRU.UN) is a Toronto-based real estate investment trust (REIT) that focuses on acquiring value-oriented retail space across Canada. Its shares dripped 2.14% in yesterday’s trading session. The stock has found itself in the red in the year-to-date period.
The REIT closed at $24.13 per share on Wednesday, June 21. For our hypothetical, we can snag 600 shares of SmartCentres REIT for a total price of $14,478. This stock last paid out a quarterly dividend of $0.154 per share, which represents a very tasty 7.6% yield. The purchase will let us churn out monthly passive income of $92.40 in our portfolio.
One more monthly dividend stock that can round out our portfolio
Sienna Senior Living (TSX:SIA) is a Markham-based company that provides senior living and long-term-care (LTC) services in Canada. This dividend stock has climbed marginally over the past month. Its shares have climbed 3.7% in the year-to-date period.
Shares of Sienna Senior Living closed at $11.45 on Wednesday, June 21. We can snatch up 1,300 shares of Sienna Senior Living to round out our passive-income portfolio at the beginning of the summer of 2023. The stock currently offers a monthly distribution of $0.078 per share, representing a monster 8.1% yield. This purchase will let us generate monthly passive income of $101.40.
Bottom line
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY |
| TF | $7.52 | 1,940 | $0.058 | $112.52 | Monthly |
| SRU.UN | $24.13 | 600 | $0.154 | $92.40 | Monthly |
| SIA | $11.45 | 1,300 | $0.078 | $101.40 | Monthly |
Our passive-income portfolio will be able to churn out monthly payouts of $306.32 with these purchases. That works out to an annual passive income payout of $3,675.84.
