Transform Your TFSA Into a Money-Making Masterpiece With Just $15,000

This dividend stock offers up returns, income, and more, making it a top TFSA option.

Amy Legate-Wolfe

Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Before joining Motley Fool Canada, she wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote: “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published February 21, 2025 4:30 pm EST

| More on: MFC

Transforming your Tax-Free Savings Account (TFSA) into a steady income generator is easier than you might think. With just $15,000, you can create a reliable stream of passive income by investing in a strong dividend stock like Manulife Financial (TSX:MFC). As one of Canada’s largest financial services companies, Manulife has a long history of paying dividends while delivering consistent growth. It’s a stock that not only provides stable returns but also benefits from global expansion and strong financial performance.

Canadian dollars are printed — Source: Getty Images

The stock

Manulife isn’t just a domestic insurer. It’s a global powerhouse with operations in Canada, Asia, and the United States. This diversification helps it navigate economic fluctuations better than some of its competitors. The company’s wealth and asset management business also provides a steady source of income, making it more than just a traditional insurance play. For long-term investors, this means Manulife can offer both growth and income, a rare combination in the mid-cap dividend space.

Looking at Manulife’s recent financials, the dividend stock continues to impress with its earnings growth. In the third quarter of 2024, Manulife reported core earnings of $1.7 billion, up 6% from the same period the previous year. A major driver of this performance was its Asia operations, which saw a 40% increase in earnings, thus reinforcing the strength of its international business. While many insurers struggle with market volatility, Manulife’s diversified business model allows it to generate solid profits even in uncertain times.

For dividend investors, Manulife’s yield is a major draw. Currently offering a forward annual dividend of $1.60 per share, its yield sits around 3.79% as of writing. With a strong track record of dividend payments and a payout ratio of just over 55%, the company has ample room to keep increasing its payouts. Unlike riskier, high-yield stocks that often slash dividends when times get tough, Manulife’s steady earnings growth supports a sustainable and growing income stream.

Future outlook

Looking ahead, analysts expect Manulife’s earnings to grow at a rate of around 9.2% per year, with revenue forecasted to increase by 16.7% annually. This positive outlook is largely due to its strength in Asia, where a growing middle class is driving demand for insurance and investment products. As more people in emerging markets seek financial security, Manulife is well-positioned to capture this expanding customer base. The company is also improving its digital capabilities, making its services more accessible and efficient. This should help maintain its competitive edge.

Manulife is also undergoing a leadership transition, with Phil Witherington set to take over as chief executive officer in May 2025. Currently leading the company’s Asia segment, Witherington has been a key figure in Manulife’s growth in the region. His appointment signals a continued focus on international expansion.

Of course, no investment is without risk. Manulife is exposed to fluctuations in interest rates and market conditions. These can impact its investment portfolio and insurance operations. However, its strong balance sheet, with over $28.8 billion in cash and a reasonable debt-to-equity ratio, suggests that the company is well-equipped to weather economic downturns.

Earning income

So, how much could you earn from Manulife from a $15,000 investment? Let’s take a look to see if it’s worth your TFSA investment.

COMPANY	RECENT PRICE	NUMBER OF SHARES	DIVIDEND	TOTAL PAYOUT	FREQUENCY	TOTAL INVESTMENT
MFC	$42.25	355	$1.60	$568	quarterly	$15,000

For Canadian investors looking to turn their TFSA into a money-making machine, Manulife presents a solid opportunity. It offers a mix of steady dividends, strong earnings growth, and exposure to global markets, making it a well-rounded investment choice. With a proven track record of rewarding shareholders and the potential for further dividend increases, it’s the kind of stock that can work hard for you while you sit back and enjoy the passive income.

Bottom line

Investing $15,000 in Manulife today could be the start of a long-term income strategy that grows over time. Whether you reinvest the dividends to compound your returns or use them as tax-free income, this investment has the potential to deliver both stability and financial growth. A well-managed, globally diversified company with strong fundamentals, Manulife makes a compelling case for investors who want to maximize the potential of their TFSA.