As of this writing, the S&P/TSX Composite dipped by 4.28% between September 20, and October 20, 2023. The decline in the Canadian benchmark index reflects the pressure that market volatility is having on equity markets. In times like these, many Canadians are looking for ways to make more money.
When done right, stock market investing can be an excellent way to make the extra money you need to meet your expenses.
The Toronto Stock Exchange (TSX) has no shortage of dividend stocks you can invest in for this purpose. By creating a portfolio of reliable dividend stocks, you can set yourself up with an excellent passive-income stream.
With the recent dip in share prices across the board, yields for even the top dividend stocks have reached previously unseen levels. That said, not every high-yielding dividend stock is a reliable cash cow.
To create a successful passive-income portfolio of dividend stocks, you must identify those with strong fundamentals and healthy balance sheets. If the underlying company cannot continue funding high-yielding dividends, your investment can go to waste.
High-yielding monthly dividend stock
TC Energy (TSX:TRP) is a monthly dividend-paying stock you can consider for this purpose. As of this writing, TC Energy stock trades for $47.35 per share, boasting an enormous 7.86% dividend yield. Typically, such high-yielding dividends are a cause for concern. However, you should not be too quick to write off a dividend stock because the dividends look unsustainable at a glance.
TC Energy is a $49.36 billion market capitalization energy company headquartered in Calgary. It develops and operates energy infrastructure across Canada, the U.S., and Mexico. The company has no formal dividend policy. In fact, all its dividend payments and declarations are at the sole discretion of its board of directors. Fortunately, the company’s board has never failed to satisfy investors.
Apart from having a reliable dividend-paying track record, it has an impressive 23-year dividend-growth streak. Not only has the company’s board paid its shareholders their dividends for so long, but it has also increased the payouts for over two decades.
TC Energy targets an annual dividend growth of 3-5%, relying on its complementary infrastructure assets, secured growth projects, and several projects in the development pipeline to fund growing its payouts.
Foolish takeaway
After completing a two-year strategic review, the company now plans to spin off its Liquid Pipelines business segment. By separating one company into two independent investment-grade, publicly traded companies, it is setting up to capture more opportunities in the long run. For investors, it means potentially achieving growing shareholder value for several decades.
While the spinoff will take some time and effort to finalize, it can help the company achieve its growth objectives and, in turn, benefit shareholders for years to come.
