All the way back in 2020, I’d discussed three ways Canadian could look to build a passive-income portfolio. Today, I want to discuss how you can generate big monthly income and pay no taxes on those dividends. We will do that by snatching up dividend stocks in a Tax-Free Savings Account (TFSA). The cumulative contribution room in a TFSA rose to $81,500 in 2022. In our hypothetical, we’ll be using all that contribution room. Let’s jump in.
Here’s a top energy dividend stock to snatch in your TFSA before April
Pembina Pipeline (TSX: PPL)(NYSE: PBA) is a Calgary-based company that provides transportation and midstream services for the energy industry. Shares of this dividend stock have climbed 19% in 2022 as of early afternoon trading on March 18. The stock is up 25% year over year.
In 2021, the company reported total revenues of $8.62 billion — up from $5.95 billion in the previous year. Meanwhile, gross profit climbed to $2.64 billion compared to $2.00 billion in 2020. Pembina and its peers have benefited from soaring oil and gas prices over the past year.
This stock closed at $45.71 on March 17. In our hypothetical, we’ll snatch up 595 shares of Pembina for a total purchase price of $27,197.45. The stock currently offers a monthly distribution of $0.21 per share, representing a 5.5% yield. Those 595 shares will allow us to generate passive income of $124.95/month in our TFSAs.
This REIT will bolster your passive-income portfolio
Canadians on the hunt for passive income should also look to real estate investment trusts (REIT). In this scenario, we’ll look to target the True North REIT (TSX: TNT.UN). This REIT primarily invests in Canadian commercial properties. Shares of this REIT have dropped 2.5% so far this year. However, the stock has surged 5.2% week over week.
The REIT unveiled its final batch of 2021 earnings on March 2, 2022. It collected roughly 99.5% of its contractual rent in 2021. Better yet, it posted strong portfolio occupancy of 96%.
True North REIT close at $7.16 per share on March 17. In this scenario, we’ll look to snatch up 3,795 shares of this REIT for a purchase price of $27,172.20. The REIT last announced a monthly distribution of $0.05 per share. That represents a monster 8.5% yield. Our shares will allow us to generate monthly passive income of $189.75 in our TFSA.
One more stock that can generate consistent passive income
Freehold Royalties (TSX: FRU) is the last dividend stock I’d look to complete our passive-income portfolio today. This Calgary-based company owns working interests in oil, natural gas, natural gas liquids, and potash properties in North America. The company is bent on generating dependable income for its shareholders. This stock has climbed 21% so far in 2022. Its shares have soared 100% from the prior year.
This stock closed at $14.73 per share on March 17. In our hypothetical, we’ll snatch up 1,840 shares of Freehold in our TFSA. The stock offers a monthly dividend of $0.08 per share, representing a tasty 6.5% yield. This means we will be able to churn out monthly passive income of $147.20 in our TFSAs going forward.
Conclusion
Our dividend stock purchase in the hypothetical TFSA will allow us to generate total monthly income of $461.90. That is a nice payout to rely on in 2022 and beyond.
