TFSA Investors: Buy These 4 Canadian Stocks and Earn Passive Income of Over $350/Month

These four Canadian stocks are excellent buys for income-seeking investors, given their steady cash flows, strong financial position, and high growth prospects.

| More on:
A close up image of Canadian $20 Dollar bills

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

A Tax-Free Savings Account (TFSA) allows Canadian citizens to earn tax-free returns on a specified amount called a contribution room. For this year, the CRA (Canada Revenue Agency) has fixed the contribution room to $6,000. However, the cumulative contribution stands at $75,500. By investing this amount in stocks that pay dividends above 5.6% yield, you can earn a passive income of $350 per month. So, if you are ready to invest, here are four Canadian stocks that pay dividends above 5.6%.


First on my list is Enbridge (TSX:ENB)(NYSE:ENB). The midstream energy infrastructure company has been consistently paying dividends for the last 66 years. It has also raised its dividends for the last 26 straight years at a CAGR of over 10%. Its low-risk, regulated business model and a diverse revenue stream of 40 assets deliver stable cash flows, permitting the company to raise its dividends consistently. The company’s forward dividend yield currently stands at 7.1%.

Meanwhile, Enbridge’s management has planned to invest around $17 billion from 2021 to 2023, expanding its asset base and boosting its financials. Further, the pickup in energy demand could increase the throughput of its mainline division, supporting its financial growth. Amid these factors, the company’s management expects its distributable cash flow per share to grow at a rate of 5-7% through 2023. So, I believe the company is well positioned to continue raising its dividends in the coming years.

Pembina Pipeline

Supported by its integrated assets, Pembina Pipeline (TSX:PPL)(NYSE:PBA) offers a full spectrum of midstream and marketing services to the energy industry. The company earns around 94% of its adjusted EBITDA from fee-based or take-or-pay contracts and regulated assets, delivering stability to its earnings and cash flows. These steady cash flows have allowed the company to raise its dividends at a CAGR of 4.9% over the last 10 years. Currently, the company pays monthly dividends of $0.21 per share, representing a forward dividend yield of 6.4%.

Meanwhile, the recovery in oil demand and prices could improve Pembina Pipeline’s margins, boosting its cash flows. Meanwhile, the management expects its adjusted EBITDA for this year to come in the range of $3.2-$3.4 billion. So, Pembina Pipeline’s dividends are safe.

NorthWest Healthcare 

Third on my list is NorthWest Healthcare (TSX:NWH.UN), which acquires and manages healthcare properties across seven countries. Given its highly defensive and diversified asset base, the company enjoys high occupancy and collection rate. Its long-term contracts, government-backed tenants, and inflation-indexed rent generates steady cash flows, allowing the company to pay monthly dividends. Currently, its forward dividend yield stands at 6%.

NorthWest Healthcare is looking at disposing of its joint venture in the United Kingdom and deleveraging its balance sheet, which could further strengthen its financial position. Meanwhile, the company is also looking at expanding its geographical footprint in key markets, such as the United States and Western Europe. These expansions could bolster the company’s earnings and cash flows.


My final pick would be BCE (TSX:BCE)(NYSE:BCE), which has a long history of paying dividends. The telecom company has announced dividends of $3.50 per share for this year, with its forward dividend yield standing at 5.9%. Amid digitization and increased remote working and learnings, the demand for telecommunication services could rise in the coming years.

Meanwhile, BCE’s management is investing in expanding its 5G coverage and fiber and WHI connections to capture the expanding addressable market. These investments could boost the company’s earnings and cash flows. Additionally, its financial position looks healthy, with its liquidity standing at $6.5 billion at the end of the March-ending quarter. Given its healthy growth prospects and steady cash flows, I believe BCE would be an excellent buy for income-seeking investors.

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.

The Motley Fool owns shares of and recommends Enbridge. The Motley Fool recommends NORTHWEST HEALTHCARE PPTYS REIT UNITS and PEMBINA PIPELINE CORPORATION. Fool contributor Rajiv Nanjapla has no position in any of the stocks mentioned.

More on Dividend Stocks

Happy family father of mother and child daughter launch a kite on nature at sunset
Dividend Stocks

Parents: Here’s Every Credit and Benefit You Can Claim From the CRA

Parents have it hard already, so make sure the CRA is doing everything for you by dishing out payments you're…

Read more »

edit Colleagues chat over ketchup chips
Dividend Stocks

3 Canadian Dividend Stocks to Buy and Hold for Life

These dividend-paying stocks have solid earnings base to support their payouts for decades.

Read more »

A golden egg in a nest
Dividend Stocks

Create a Million-Dollar TFSA With Just $1,000

If you have a TFSA, you can easily make a million-dollar portfolio by investing on a consistent basis in this…

Read more »

Dollar symbol and Canadian flag on keyboard
Dividend Stocks

3 Canadian Stocks With Over 6% of Dividend Yield

Boost your passive income with three safe dividend stocks.

Read more »

TFSA and coins
Dividend Stocks

TFSA Pension: 2 TSX Dividend Stocks to Buy Now and Hold for Decades

These top TSX stocks pay great dividends and look cheap to buy right now for a TFSA retirement fund.

Read more »

Dividend Stocks

TFSA Dividend Income: 2 TSX Stocks to Buy on the Pullback

These TSX stocks look oversold and pay attractive dividends that continue to grow.

Read more »

oil tank at night
Dividend Stocks

1 Top TSX Energy Stocks for Summer 2022

TSX energy stocks have tanked recently, but they could enjoy a nice summer rally. Here's one top stock I'm eyeing…

Read more »

Dividend Stocks

Market Correction: 2 Cheap TSX Dividend Stocks to Buy Now for a Self-Directed RRSP

These top TSX dividend stocks look cheap right now for a self-directed RRSP focused on total returns.

Read more »