TFSA Passive Income: Earn $111/Month

Investors can leverage TFSA to invest in these top dividend stocks to earn $111/month.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The fundamentally strong Canadian dividend stocks can help investors earn steady passive income in all market conditions. Further, one can leverage the TFSA (Tax-Free Savings Account) to earn tax-free dividends. 

Thankfully, the TSX has several stocks that have been consistently paying and growing their dividend payments, regardless of the market conditions, which makes them an attractive investment to earn worry-free passive income. Against this backdrop, the following are the dependable stocks to earn tax-free passive income. 

Enbridge 

Enbridge (TSX:ENB) is a reliable stock for TFSA investors to earn regular passive income. The company owns high-quality energy infrastructure assets and transports crude oil and gas. In addition, it has ownership interests in renewable energy facilities. 

Thanks to its well-established business and high-quality asset base, this large-cap company consistently generates solid distributable cash flows (DCF). This has enabled the company to pay a regular dividend for 68 years. Furthermore, Enbridge increased the dividend at an average annualized growth rate of 10% in the past 28 years. 

Created with Highcharts 11.4.3Enbridge PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

The resiliency of its payouts is reflected in its stellar dividend payments and growth history. It’s worth highlighting that the company has even increased its dividend during the pandemic when several energy companies suspended and lowered their payouts. 

Looking ahead, Enbridge’s solid asset base, high utilization rate, and continued investments in conventional assets and renewable energy sources position it well to deliver substantial distributable cash flows and offer higher dividend payments. Further, long-term contracts, regulated cost-of-service tolling frameworks, power-purchase agreements, and low-risk commercial arrangements will add stability to its payouts. 

Overall, its extensive midstream assets, focus on low capital intensity growth projects, and a target payout ratio of 60-70% of DCF make it a must-have income stock. Further, Enbridge offers an attractive dividend yield of 7.30%. 

SmartCentres

TFSA investors could invest in high-quality REITS (real estate investment trusts). REITs are famous for their higher payouts, which makes them an attractive investment to earn tax-free passive income. Among top REITs, investors could invest in SmartCentres (TSX:SRU.UN) for its solid payouts and high yield. 

SmartCentres is Canada’s leading fully integrated REIT with an extensive portfolio of income-producing properties like retail and office space. The REIT benefits from its high and industry-leading occupancy level of 98%. Further, its high-quality tenant base (including essential services providers like large and creditworthy retailers) adds stability to its cash flows and positions it well to enhance its shareholders’ returns. 

Created with Highcharts 11.4.3SmartCentres Real Estate Investment Trust PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

The REIT will likely deliver solid cash flows on the back of its high occupancy rate. Furthermore, SmartCentres’s debt is mostly fixed rate, which makes it less susceptible to the high interest rate environment. 

SmartCentres REIT offers monthly payouts and has an attractive yield of f 7.53% (based on its closing price on July 14). 

Earn $111/month in passive income

These companies have a resilient business model and solid dividend-payout history. Further, their strong fundamentals and ability to grow earnings and cash flows in all market conditions position them well to enhance their shareholders’ returns via higher dividend payouts in the coming years. Also, their well-covered payouts and high dividend yields make these stocks attractive investments to earn worry-free passive income. 

CompanyRecent PriceNumber of SharesDividend Per SharePayoutFrequency
Enbridge$48.56185$0.887$164.4Quarterly
SmartCentres REIT$24.64365$0.154$56.25Monthly
Price as of 07/14/2023

The table shows that if you invest about $9K each in shares of Enbridge and SmartCentres, you can earn about $111 in tax-free dividend income every month. 

Just Released! 5 Stocks Under $50 (FREE REPORT)

Motley Fool Canada's market-beating team has just released a brand-new FREE report revealing 5 "dirt cheap" stocks that you can buy today for under $50 a share.

Our team thinks these 5 stocks are critically undervalued, but more importantly, could potentially make Canadian investors who act quickly a fortune.

Don't miss out! Simply click the link below to grab your free copy and discover all 5 of these stocks now.

Claim your FREE 5-stock report now!

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 Sneha Nahata has no position in any of the stocks mentioned. The Motley Fool recommends Enbridge and SmartCentres Real Estate Investment Trust. The Motley Fool has a disclosure policy.

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Dividend Stocks

Canadian dollars are printed
Dividend Stocks

Beat the TSX With These Cash-Gushing Dividend Stocks

Learn how recent macro events have affected stocks on the TSX, and find out which stocks are thriving despite challenges.

Read more »

dividends grow over time
Dividend Stocks

How I’d Build a $15,000 Portfolio Around These 3 Blue-Chip Dividend Stocks

Dividend stocks are one thing, but blue-chip dividend stocks are some of the top options out there.

Read more »

TFSA (Tax-Free Savings Account) on wooden blocks and Canadian one hundred dollar bills.
Dividend Stocks

TFSA Investors: 2 TSX Stocks to Buy for Dividend Income

These stocks have increased their dividends every year for decades.

Read more »

exchange traded funds
Dividend Stocks

2 Rock-Solid Canadian ETFs to Safeguard Your Portfolio During Trump’s 90-Day Tariff Pause

BMO Low Volatility Canadian Equity ETF (TSX:ZLB) and another ETF were built for tougher market sledding.

Read more »

people relax on mountain ledge
Dividend Stocks

3 TSX Dividend Stocks to Buy for TFSA Passive Income

These stocks trade at reasonable prices and offer high dividend yields.

Read more »

Paper Canadian currency of various denominations
Dividend Stocks

The Smartest Canadian Stock to Buy With $250 Right Now

Analysts are super excited about this Canadian stock, so let's get into why.

Read more »

chart reflected in eyeglass lenses
Dividend Stocks

1 Top TSX Stock Down 18% to Buy and Hold For Decades

TD picked up a nice tailwind to start 2025. Are more gains on the way?

Read more »

Forklift in a warehouse
Dividend Stocks

9.5% Dividend Yield! I’m Buying This TSX Stock and Holding for Decades

Looking for a dividend stock that's ready to stand the test of time? Then consider this top notch option.

Read more »