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Top Canadian Stocks: How to Make $500 Monthly in Passive Income

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The internet offers many ways to generate passive income. Writing blogs would be some of the common ones. But investing in stocks and receiving regular dividends is one of the most underrated and convenient options among them.

It is among the only few options where you don’t work for money, but money indeed works for you. Don’t get intimidated as to choose the right stocks. There are tons of TSX stocks that have been paying stable dividend payouts for years.

Remember, share markets have created a tremendous amount of wealth for long-term investors over the years. So, if you want to rake in $500 a month, you will need to invest approximately $100,000 in a stock that yields close to 6%.

Top Canadian stocks: TC Energy

Consider top midstream energy company TC Energy (TSX:TRP)(NYSE:TRP). The stock yields 6.2%, which means an investment of $100,000 will generate $6,200 in dividends annually or $500 a month. Notably, TC Energy has increased dividends for the last 20 consecutive years.

But energy stocks have been some of the market laggards for the last few years. Should you invest in TC Energy stock?

Even if TC Energy is an energy company, it belongs to the midstream space. It has little exposure to volatile oil and gas prices. It is a pipeline company and earns a fixed-fee on its long-term contracts. That’s why its earnings are stable and predictable, which facilitates dividend payments.

TC Energy is a slow-moving stock and could be an apt pick for your retirement portfolio. One should not expect extravagant returns from it in the short term. But over the long term, it should create a decent amount of wealth with consistently increasing dividend payments.

In the last two decades, it has delivered more than 700% returns, including dividends, notably beating the TSX Composite Index.


Top telecom company BCE (TSX:BCE)(NYSE:BCE) should also fit into your long-term investment portfolio. BCE stock yields 6%, which would provide $6,000 in dividends per year on the investment of $100,000.

Telecom companies like BCE earn relatively stable revenues in any economic condition. That’s why they usually outperform in bearish markets. Notably, telecom companies could start a fresh growth chapter with the arrival of the 5G. If you want to bet on the emerging 5G technology, the biggest of all BCE stock should be on top of your list.

BCE has also been a slow-moving stock, but has created a decent wealth for shareholders in the past.

Bottom line

The stock price will fluctuate, but as the company manages to increase its earnings, the stock will grow over the years. It should be noted that, with stocks, your initial investment will continue to grow even when you take out periodic payments (dividends) regularly.

Investing in quality stocks like these, you would make a decent passive income and can achieve complete financial independence for the rest of your life.

Here's a list of more of such top dividend stocks...

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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 Vineet Kulkarni has no position in any of the stocks mentioned.

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