TFSA Investors: Earn $202/Month Through These 2 Top Dividend Stocks

Consider investing in these two top dividend stocks in your TFSA to earn a significant, monthly, and tax-free passive income.

| More on:
money cash dividends

Image source: Getty Images

The Tax-Free Savings Account (TFSA) has been one of the best investment vehicles for Canadians since the account type was introduced in 2009. Each year, the government adds more contribution room, letting you store more of your investments in the tax-advantaged account. After the 2022 update, the cumulative TFSA contribution room since its inception stands at $81,500.

TFSA investing can serve several purposes for you. You can use the account type to create a secondary retirement nest egg. The account is quite flexible, and you can withdraw money from your TFSA without incurring any early withdrawal penalties or income tax. It means that you can also use the account to generate a monthly passive income that doesn’t move you to a higher tax bracket.

Provided that you have the contribution room and investment capital to spare, here are two dividend stocks that you could store in your TFSA to boost your monthly income.

Enbridge

Enbridge Inc. (TSX:ENB)(NYSE:ENB) is a $103.06 billion market capitalization giant in the Canadian energy industry headquartered in Calgary. The energy infrastructure company boasts an extensive pipeline network that transports a significant chunk of all the natural gas and crude oil used in North America, playing an important role in the economy.

Enbridge stock is also a reliable dividend stock with an extensive track record that it has maintained throughout the pandemic.

Enbridge has also started making inroads within the renewable energy industry for a brighter future as the world phases out fossil fuels. Enbridge stock trades for $50.87 per share at writing, and it boasts a juicy 6.76% dividend yield. Investing $20,000 in Enbridge stock could provide you with $1,352 per year through shareholder dividends alone, translating to $112.66 per month.

BCE

BCE Inc. (TSX:BCE)(NYSE:BCE) is a $59.03 billion market capitalization giant in the Canadian telecom industry that hardly requires any introductions. The leading telco in Canada, BCE has a substantial reach through its extensive infrastructure. The company has also accelerated its capital spending to upgrade to 5G and provide coverage to more Canadians.

The Canadian Dividend Aristocrat has increased its shareholder dividends at a compounded annual growth rate of 4.1% in the last decade, and it looks well-positioned to continue dividend hikes. BCE stock trades for $64.96 per share at writing, and it boasts a juicy 5.39% dividend yield. Investing $20,000 in BCE stock could provide you with $1,078 per year through shareholder dividends alone, translating to $89.83 per month.

Foolish takeaway

Dividend investing in your TFSA can be an excellent method to generate more income by making your investment capital work for you. If you have the contribution room to spare and you can invest $20,000 in Enbridge stock and BCE stock each, you can earn $202.49 per month tax-free through shareholder dividends.

In an ideal world, allocating your investment capital to these two stocks alone could provide you with a significant boost to your income through shareholder dividends. However, you should diversify your capital across several income-generating assets to reduce your capital risk. Remember that it’s crucial to invest in stocks with a reputation for reliably paying shareholder dividends if you want to create a passive income stream in your TFSA.

Enbridge stock and BCE stock are both reliable dividend payers you could 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 recommends Enbridge.

More on Dividend Stocks

Retirement plan
Dividend Stocks

FIRE Movement: How to Retire Early Using Your TFSA

You can increase your financial independence and even retire early by investing in solid dividend stocks in your TFSA over…

Read more »

Senior Man Sitting On Sofa At Home With Pet Labrador Dog
Dividend Stocks

RRSP Investors: 2 Stocks to Buy Now for a Personal Pension Fund

RRSP investors can find top TSX dividend stocks at cheap prices today.

Read more »

Cogs turning against each other
Dividend Stocks

1 Passive-Income Stock to Counter Volatility

Looking for a stock that can counter volatility now and tomorrow? This stock is a reliable option for growth and…

Read more »

edit Real Estate Investment Trust REIT on double exsposure business background.
Dividend Stocks

A Top REIT for High-Yielding Income

This top REIT on the TSX offers investors a considerable amount in shareholder dividends through its massive dividend yield.

Read more »

investment research
Dividend Stocks

Young Investors: Create Cash Flow With This Top Dividend Stock

If you're a young investor looking for cash flow, you need a strong dividend stock and solid banking program designed…

Read more »

Hand writing Time for Action concept with red marker on transparent wipe board.
Dividend Stocks

3 Superb Dividend Stocks I’m Ready to Buy

The market is full of great options for income-seeking investors. Here are three superb dividend stocks to buy now.

Read more »

Payday ringed on a calendar
Dividend Stocks

Gen Z Investors: Create a Stable Passive-Income Stream of $188/Month for Retirement

This passive-income stock is perfect for Gen Z investors who don't have much to invest but want to see stable,…

Read more »

exchange-traded funds
Dividend Stocks

2 ETF Bargains You Shouldn’t Miss in 2022

Index ETFs are only discounted when there is a market-wide slump, which is rarer than sector-specific dips, so you should…

Read more »