Most financial experts advise individuals and households to create multiple passive-income streams to help them accelerate their retirement plans by a few years. One low-cost way to begin a steady and recurring passive-income stream is by investing in quality dividend stocks.
However, before investing in dividend stocks, it’s essential to understand that these payouts are not guaranteed and can suspended if a company’s financials deteriorate amid challenging macro conditions. So, in addition to a company’s dividend yield, investors should consider other factors such as the payout ratio, balance sheet debt, and the ability to grow these payments over time.
In this article, I have identified two TSX dividend stocks you can own in 2025 and earn $1,000 in passive income each year.
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Enghouse Systems stock
Founded over 40 years ago, Enghouse (TSX:ENGH) is valued at a market cap of $1.54 billion. It has two primary business segments that include the following:
- Interactive Management Group: It provides customer interaction software for remote work, customer service, and communications management, serving industries like insurance, banking, and healthcare.
- The Asset Management Group: It delivers software solutions for network infrastructure, fleet management, emergency services, and video/cloud TV systems to cable operators, telecom providers, transit agencies, and public safety organizations.
Enghouse offers both private and multi-tenant cloud deployments across its product portfolio. According to analyst estimates, Enghouse is forecast to expand its earnings per share from $1.47 in fiscal 2024 (ended in October) to $1.59 per share in 2025 and $1.71 per share in 2026. Its free cash flow is projected at $115 million in 2025.
Enghouse pays an annual dividend of $1.04 per share, which translates to a forward yield of 3.7%. Moreover, these payouts have risen from just $0.08 per share in 2010.
Given the company’s outstanding share count, Enghouse’s annual dividend expense is around $58 million, indicating a payout ratio of 50%. Analysts remain bullish on the TSX tech stock and expect it to gain around 20% in the next 12 months.
Maple Leaf Foods stock
Maple Leaf Foods (TSX:MFI) produces prepared meats, ready-to-eat meals, snack kits, fresh pork, poultry, and plant-based protein products. It markets these products under brands like Maple Leaf, Schneiders, Field Roast, and Lightlife across North America and internationally.
In the last 10 years, Maple Leaf has raised its dividends at an annual rate of 18.5%, which is impressive. Today, it pays shareholders an annual dividend of $0.96 per share, indicating a yield of 4.1%.
In addition to a tasty dividend yield, the TSX stock trades at an attractive valuation. Bay Street expects adjusted earnings to grow from $0.09 per share in 2023 to $1.36 per share in 2025. Further, its free cash flow (FCF) is forecast at $230 million in 2025. So, priced at 15.6 times forward earnings and 11.4 times forward FCF, Maple Leaf stock is not too expensive and trades at a 45% discount to consensus earnings estimates.
The Foolish takeaway
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY |
| Enghouse Systems | $27.82 | 461 | $0.26 | $119.86 | Quarterly |
| Maple Leaf Foods | $21.20 | 605 | $0.24 | $145.2 | Quarterly |
The average dividend yield of the two stocks is 3.9%. It means you would need to invest a total of $25,650 equally distributed in the TSX stocks to earn $1,000 in annual dividend income. If the two companies raise payouts by 15% annually, your dividend income will double in fewer than five years, enhancing the yield at cost significantly.
