The Canadian stock market provides investors plenty of opportunities to meet their short-, medium-, and long-term financial goals, no matter how different they can be. Creating a portfolio of income-generating assets to earn a steady stream of passive income is one of the most popular methods that investors use their Tax-Free Savings Accounts (TFSAs).
I will discuss three top stocks that you can buy today for this purpose and hold in your TFSA portfolio forever to earn reliable passive income.
BCE (TSX:BCE)(NYSE:BCE) is a giant in the Canadian telecom space that should be on your radar for dividend stocks. The company is the most dominant presence in Canada’s recession-proof telecom industry. It provides wireless, wireline, internet, and subscription TV services to millions of Canadians throughout the country. It also operates one of Canada’s largest media companies with several TV and radio stations under its belt.
The demand for its services skyrocketed in 2020, as the work-from-home trend became commonplace. The pandemic acted as an unexpected tailwind for several tech and telecom companies worldwide, expanding on already impressive performances in both industries. BCE stock is trading for $61.28 per share at writing, and it boasts a juicy 5.71% dividend yield that you could lock in right now.
Enbridge (TSX:ENB)(NYSE:ENB) is one of the top stocks to consider adding to your portfolio today, as the market conditions continue to favour energy sector stocks. The stock is making an excellent recovery from its pandemic-fueled lows during 2020, and there could be more upside on the way for Enbridge.
Enbridge owns and operates a network of natural gas transmission and renewable energy assets that performed well last year. The strong performance in these segments managed to partially offset the downturn in its oil pipeline service, as fuel demand plunged amid the pandemic. The economic recovery in Canada and the U.S. is strong, as both countries make more progress in vaccine rollouts. With air travel increasing in both countries, the rising demand for jet fuel and gasoline could see its oil pipeline business rebound in the coming months, making it an ideal buy today.
Enbridge stock is trading for $50.25 per share at writing, and it boasts a juicy 6.65% dividend yield.
It is no secret that the renewable energy sector will become the next big thing for investors seeking opportunities for substantial long-term gains. TransAlta Renewables (TSX:RNW) is an ideal stock to consider adding to your portfolio for this purpose, as clean energy demand looks ready to explode over the next decade.
TransAlta Renewables develops, acquires, owns, and operates multiple renewable energy production assets that make it an excellent stock to consider if you want exposure to the renewable energy space. The company owns an extensive portfolio that consists of seven natural gas production, 13 hydroelectric, and 23 wind power facilities alongside a gas pipeline and solar power facility.
TransAlta Renewables stock is trading for $21.06 per share at writing, and it boasts a juicy 4.46% dividend yield.
Whether you are a retiree looking to supplement your retirement income or have different reasons for seeking passive income, using reliable income-generating assets in your TFSA can be the best way to achieve your goals.
Any income in your TFSA does not count towards your taxable income. Creating a robust portfolio of income-generating assets in your TFSA can let you earn substantial dividend income without worrying about moving to a higher tax bracket.
TransAlta Renewables stock, Enbridge stock, and BCE stock could be ideal stock picks for you to consider for this purpose.
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 Adam Othman has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Enbridge.