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Millennial TFSA Investors: Earn $450/Month Cash Straight in Your Pocket

Everybody could use a little extra income every month. If you are a millennial investor, earning an additional $450 per month can boost your total income and take care of your expenses. Investing in high-quality dividend stocks, especially those with an excellent track record, can help you do that.

Dividend stocks of companies that are regular with payments, exhibit capital gains, and have the fundamentals to support dividends for years to come are the perfect way to earn a substantial amount.

To this end, I think stocks from Bank of Montreal (TSX:BMO)(NYSE:BMO) and Bank of Nova Scotia (TSX:BNS)(NYSE:BNS) can offer you the ideal opportunity if you buy and hold them in your Tax-Free Savings Account (TFSA). Let us take a better look at both stocks to determine how you can earn an extra $450 per month through your TFSA.

Bank of Nova Scotia

BNS continues to be one of my favourite banking stocks. Also known as the Scotiabank, BNS has expanded its operations to tap the potential of the Latin American markets. The region has several countries on the upward trajectory, with prospects to grow at a decent pace in the coming decades. Latin America does come with its issues from time to time, but the outlook is generally reasonable.

In Q4 2019, Scotiabank reported good results. Its net income rose 2% as compared to the same period last year, and its adjusted revenue rose by 7%. The bank finished the fiscal year with a robust CET1 ratio of 11.6%, which means it is well equipped to ride out a downturn in the economy.

The company enjoys a dividend yield of 4.83% with a share price of $74.59, which is up 9.26% year to date.

Bank of Montreal

Bank of Montreal is another giant in Canada’s banking sector. Over the past half-decade, BMO shares have grown by more than 28%, with an increase in dividends by 30% in the same period. BMO’s quarterly earnings report saw it missed some of its goals, and its restructuring resulted in the loss of a few jobs.

Most of the $484 million that BMO spent in the quarter was related to covering expenses for job cuts. It lost roughly 5% of its workforce, equal to around 2,300 jobs. The environment in Canada’s banking sector has been unforgiving recently. However, stocks like BMO can still be considered robust long-term buys.

Bank of Montreal exhibited steady growth in the past three years. The annualized growth rate in the last three years had been 6.5% and net income growth was more than 7.5%. At $99.96 per share at the time of this writing, BMO is paying shareholders dividends at 4.24%.

Foolish takeaway

Investing $60,000 in BNS stocks can help you earn $241 per month through its dividends. An investment of $65,000 in BMO stock can add $229 to your TFSA through dividend payouts. With a total investment of $125,000 divided between the shares of the two financial institutions, you can earn around $470 per month in passive income.

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Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends BANK OF NOVA SCOTIA.

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