2 Dividend Stocks to Generate $164/Month in Passive Income

These two Canadian dividend stocks could be an excellent way to generate significant passive income.

| More on:
grow dividends

Image source: Getty Images

Passive income is money you earn without having to do any work for it. Investing your money in the right income-generating assets can help you create an income stream that will keep the cash flowing into your bank account, even while you sleep.

Dividend investing is one of the best methods to create a revenue stream in your self-directed portfolio that offers you decent returns. Dividend-paying companies share a portion of profits with their shareholders through quarterly or monthly payouts. Creating a reliable income stream through dividend stocks requires investing in stocks that boast a reputation for providing regular and sustainable payouts to their investors.

Today, I will discuss a couple of dividend stocks that can be ideal for this purpose.


Enbridge Inc. (TSX:ENB)(NYSE:ENB) is an excellent stock to consider if you want to generate a passive income through your self-directed portfolio. Enbridge is a $107.09 billion market capitalization energy infrastructure company with an extensive pipeline network throughout North America. The company is responsible for transporting a significant portion of all the natural gas and oil used in the region, playing a vital role in the economy.

Enbridge stock has consistently increased its shareholder dividends at a compounded annual growth rate of 10% since 1995. The continuing recovery in energy demand could soon result in another significant boost in its shareholder dividends.

Enbridge stock trades for $52.79 per share at writing, and it boasts a 6.54% dividend yield. Suppose that you invest $20,000 in Enbridge shares. In that case, you could earn $1,304 each year through dividends alone, translating to $108.66 per month.

Toronto-Dominion Bank

Toronto-Dominion Bank (TSX:TD)(NYSE:TD) is another reliable stock to consider if you want to create a passive income stream through dividend stocks. TD Bank is a $193.88 billion market capitalization bank with a track record of paying its investors their dividends for the last 164 years. The bank stock has increased its dividends for the last 26 years, making it a Canadian Dividend Aristocrat.

Strong performances in its domestic and international banking operations allow TD Bank to fund its dividend payouts comfortably. TD Bank stock trades for $106.27 per share at writing, and it boasts a 3.35% dividend yield. Suppose that you invest $20,000 in TD Bank shares. In that case, you could earn $670 each year through shareholder dividends, translating to $55.83 per month.

Foolish takeaway

Investing a hypothetical $20,000 in Enbridge stock and TD bank stock each could generate $164.49 per month through shareholder dividends alone. However, it’s important to remember that you should not allocate all your funds to just two assets in case they underperform due to any reason.

Diversifying your investment capital across several stocks can help you create a passive income stream that can mitigate risk. Enbridge stock and TD stock could be excellent foundations that you can use to start building your dividend income portfolio.

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

A worker uses a double monitor computer screen in an office.
Dividend Stocks

2 Top Commodity Stocks to Hedge Your Portfolio Against Inflation

Consider investing in these two commodity-backed stocks to hedge your portfolio against the inflationary environment.

Read more »

grow dividends
Dividend Stocks

1 Cheap Stock to Turn a $20,000 TFSA Into $267,000

If you're looking to boost your TFSA, you need a cheap stock that you can hold for decades. And I…

Read more »

edit Person using calculator next to charts and graphs
Dividend Stocks

2 of the Best Monthly Passive-Income Stocks to Buy in Canada Right Now

Here are two of the best Canadian monthly passive income stocks you can consider buying right now to hold for…

Read more »

stock analysis
Dividend Stocks

3 TSX Stocks I Will “Never” Sell

Few companies offer a powerful enough combination of dividends and growth potential to deserve a permanent place in your portfolio.

Read more »

value for money
Dividend Stocks

2 Cheap TSX Stocks for TFSA and RRSP Investors to Buy Now

These stocks look attractive today to buy for a TFSA or RRSP portfolio.

Read more »

Increasing yield
Dividend Stocks

3 TSX Stocks With High Dividend Yields

These three high-yielding dividend stocks would be excellent additions to your portfolio in this volatile environment.

Read more »

Payday ringed on a calendar
Dividend Stocks

New Investors: 3 Top TSX Dividend Stocks That Pay Cash Monthly

Canadian investors looking for monthly dividends have plenty of options on the TSX. Here's three of my favourite stocks for…

Read more »

woman data analyze
Dividend Stocks

These U.S. Stocks Are No-Brainer Additions to Your Portfolio

Buy these two no-brainer U.S. stocks if you want to gain exposure to international stocks in your self-directed portfolio.

Read more »