TFSA Users: $20,000 in These Stocks Pays You $115 a Month

Investors can pile up stocks like TransAlta Renewables Inc. (TSX:RNW) and Cineplex Inc. (TSX:CGX) in their TFSA to gobble up nice monthly income.

| More on:
Payday ringed on a calendar

Image source: Getty Images

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

All the way back in March, I’d explored some TFSA strategies for investors to consider this year. The first I’d covered was an income-focused strategy. Fortunately, the cumulative TFSA contribution has steadily expanded over the past decade. This affords investors more flexibility in crafting their portfolios.

Today, I want to cover a hypothetical in which we can use $20,000 of our contribution room to generate a nice tax-free, monthly income stream. The best thing about this is that we will still have over $40,000 in room to invest in growth-oriented equities. Let’s dive in and look at three stocks that can help us hit a goal of over $100 in tax-free income per month.

TransAlta Renewables

I’m still bullish on green energy stocks in late 2019, and TransAlta Renewables (TSX:RNW) is one of my favourites. Shares have climbed 53% in 2019 as of close on November 28. The stock has achieved average annual returns of 10% over the past five years.

TransAlta is trading at a premium right now after putting up what has been a stellar year so far. The stock is trading close to a 52-week high, and it possesses a price-to-earnings ratio of 20 as well as a price-to-book value of 1.7. Still, in this case we are here for TransAlta’s stellar dividend yield.

The stock currently boasts a monthly dividend of $0.07833 per share. This represents a 6.2% yield. In our hypothetical, we can purchase 440 shares of TransAlta stock for $6,608.80. This adds up to a monthly dividend payment of roughly $34.40.


In late October, I’d suggested that investors should grab Cineplex (TSX:CGX) ahead of its Q3 earnings report. Cineplex has been a frustrating hold in 2019, but shares have climbed 10% over the past month as of close on November 28. This has pushed the stock into positive territory for the full year.

The company saw adjusted EBITDA surge 93% year over year in Q3 to $106.1 million. It was driven by a 1.8% increase in theatre attendance, as the summer slate managed to give a boost to the North American cinema industry.

Back to our hypothetical, Cineplex stock last closed at $25.27. We’re going to scoop up 260 shares of Cineplex for a total of $6,570.20. Cineplex stock currently boasts a monthly dividend payout of $0.15 per share. This represents a beefy 7.1% yield. In this case, we’d rake in $39 per month from the Cineplex share purchase I’ve outlined here.

Inter Pipeline

Inter Pipeline (TSX:IPL) is a Calgary-based company that is one of the leading natural gas and NGL extraction businesses in North America. Its stock has climbed 22.5% in 2019 as of close on November 28. Revenue is forecast to grow at a steady rate into the next decade. Inter Pipeline is trading close to a 52-week high, but it still offers a P/E ratio of 15 and a P/B value of 2.2. This puts it in favourable value territory relative to industry peers.

Shares of Inter Pipeline last closed at $22.13. A purchase of 300 shares come out to a total of $6,639. Inter Pipeline stock last paid a monthly dividend of $0.1425 per share. This represents a strong 7.7% yield. In this case, Inter Pipeline will provide our portfolio with a payout of $42.75 per month.

Our total purchases bring us below the $20,000 threshold. The share purchases for these three stocks add up to a monthly dividend payout of $116 per month.

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 Ambrose O'Callaghan has no position in any of the stocks mentioned.

More on Dividend Stocks

Tech Stocks

Got $300? 2 Simple TSX Stocks to Buy Right Now

These two TSX stocks aren’t as popular as other names, but they are smart buys right now because both are…

Read more »

Increasing yield
Dividend Stocks

3 TSX Stocks With High Dividend Yields

Not all stocks with high-dividend yields are great buys. Here are three stocks to consider for your portfolio today.

Read more »

edit Balloon shaped as a heart
Dividend Stocks

Dividend Lovers: 2 U.S. Stocks to Power Up Your Portfolio

Dividend investors in Canada can consider buying these two top U.S. stocks right now to diversify their portfolios and get…

Read more »

Growth from coins
Dividend Stocks

2 TSX Stocks to Buy With Dividends Yielding More Than 3%

Here are two TSX stocks to buy today with dividends yielding more than 3%!

Read more »

growing plant shoots on stacked coins
Dividend Stocks

TFSA Passive Income: Earn $317 Every Month Tax Free for Life

By leveraging A TFSA, Canadians can earn a tax-free passive income of $317 every month for life.

Read more »

edit Close-up Of A Piggybank With Eyeglasses And Calculator On Desk
Dividend Stocks

2 Cheap TSX Dividend Stocks to Buy Now for a TFSA or RRSP

TFSA and RRSP investors can now buy top TSX dividend stocks at cheap prices for portfolios focused on passive income…

Read more »

Man data analyze
Dividend Stocks

Have $1,000? 2 All-Weather Dividend Stocks to Buy and Hold Forever

Canadians with $1,000 to invest can buy two all-weather dividend stocks today and hold them forever.

Read more »

office buildings
Dividend Stocks

2 Stocks to Invest in U.S. Real Estate

Do you need more income? Consider diversifying your real estate portfolio to the south via value U.S. REITs.

Read more »