Passive Income: 2 Dividend Stars to Buy

Looking for stocks to build a passive income portfolio around? Find out why these two TSX superstars are ideal options to buy now.

| More on:
Various Canadian dollars in gray pants pocket

Image source: Getty Images

There’s no doubt that it’s a great feeling to have your money working for you passively. Fortunately for Canadian investors, the TSX is home to many stocks ideal for a passive income investing strategy.

The type of stocks ideal for this strategy are generally blue-chip star stocks with healthy dividends. Sometimes it may be tempting to chase stocks with higher yields, but that is risky.

Those dividends could seem promising, but if they’re not backed by a solid stock they’re doomed to be cut. In the end, you could end up worse off by yield hunting rather than sticking with established dividend superstars.

Today, we’ll look at two TSX giants that are great choices for a passive income strategy. They both offer unique benefits to investors that shouldn’t be overlooked.


Bank of Montreal (TSX:BMO)(NYSE:BMO) is one of the major Canadian bank stocks. As such, its name is practically synonymous with dividend stability.

When it comes to building a passive income portfolio, stocks like BMO should be near the top of the list for investors to check out. This dividend star has paid a dividend every single year since 1829. Moreover, it’s increased the dividend for much of that time.

BMO has ample financial cushion with a range of revenue sources that allow it to offer bulletproof dividends to its investors. Combine that with its respectable share price growth and you have a stock ideal for passive income investing.

As of this writing, BMO is trading at $147.78 and yielding 3.6%. For investors looking to build out a collection of dividend-paying stocks, BMO is one of the premier choices without doubt.


Fortis (TSX:FTS)(NYSE:FTS) is a large Canadian utility provider with operations across multiple continents. FTS has long been associated with rock-solid dividends with decent if unspectacular growth prospects.

The key to success for FTS is the way its revenue sources are structured. Utilities have constant demand and since it provides these services through mostly regulated contracts, Fortis’ revenue sources are extremely consistent and reliable.

This all translates to FTS being a stock that can resist market forces and provide investors with a solid dividend. A beta of 0.1 tells you this stock tends to avoid moving in lockstep with the broader market, and it comes with a yield of 3.61% as of this writing.

While that yield isn’t going to drop jaws to the floor by any means, it’s more than respectable when you consider it’s attached to a passive income star like FTS. You can expect FTS to consistently offer a solid dividend, even in trying times.

Investors looking for a safe haven for their cash to grow through passive income investing should consider FTS.

Passive income strategy

Both BMO and FTS can be key ingredients to a successful passive income investing recipe. These blue-chip stocks offer Canadian investors reliable dividend income, even during the toughest of times.

Investors looking to scoop up shares of some top TSX dividend stocks should consider these two names.

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 Jared Seguin has no position in any of the stocks mentioned. The Motley Fool recommends FORTIS INC.

More on Dividend Stocks

pipe metal texture inside
Dividend Stocks

TC Energy Stock: An Undervalued 7.8% Dividend Stock

TC Energy stock appears to be trading at a discount of about 20%.

Read more »

Man data analyze
Dividend Stocks

1 Dividend Stock Down 13% to Buy Right Now

Parkland (TSX:PKI) stock may be down by 13%, but shares are still way up in the last year. So, this…

Read more »

Senior Couple Walking With Pet Bulldog In Countryside
Dividend Stocks

TFSA 101: How Pensioners Can Earn $4,987.50 Per Year in Tax-Free Passive Income

Retirees can use this TFSA strategy to boost portfolio yield while reducing risk.

Read more »

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

Retirees: Here’s How to Boost Your CPP in 2024

By making RRSP contributions, you can lower your after-tax CPP amount. You can then use the RRSP space to invest…

Read more »

Dividend Stocks

Buy 3,000 Shares of This Super Dividend Stock For $3,300/Year in Passive Income

Are you looking for a super dividend stock to buy now and generate a whopping passive-income stream? Here's an option…

Read more »

Question marks in a pile
Dividend Stocks

Where Will Brookfield Infrastructure Partners Stock Be in 5 Years?

BIP (TSX:BIP) stock fell dramatically after year-end earnings, but there could be momentum in the future with more acquisitions on…

Read more »

Utility, wind power
Dividend Stocks

So You Own Algonquin Stock: Is It Still a Good Investment?

Should you buy Algonquin for its big dividend? Looking forward, the utility is making a lot of changes.

Read more »

stock data
Dividend Stocks

Passive Income: How Much Should You Invest to Earn $1000/Year

Dependable income stocks like Enbridge can help you earn worry-free passive income regardless of market and commodity cycles.

Read more »