4 Passive Income Stocks for a Perfect Dividend TFSA

These four passive income stocks can create thousands in annual income, and better still will last you for decades in your TFSA.

Amy Legate-Wolfe

Author Bio Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Her work can also be found at Canada's National Observer, where she writes on the business side of climate action. Before joining Motley Fool Canada, Amy wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Social Media Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published April 10, 2022 12:00 pm EDT

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The perfect dividend Tax-Free Savings Account (TFSA) means finding passive income stocks that will last decades. And I do mean decades. If you’re a 20-year-old starting out investing, then a Motley Fool investor could literally make millions. But it all comes down to the right companies.

In that case, you want to find blue-chip companies that have a history of paying out dividends and increasing them on a regular basis. Then, putting them in your TFSA means you’re making tax-free income you can take out at any time!

So here, I’m going to go over four passive income stocks to create the perfect dividend TFSA.

money cash dividends — Image source: Getty Images

Fortis

Fortis (TSX: FTS)(NYSE: FTS) is about to be the only company on the TSX today to be a dividend king. This means it’s been increasing its dividend for a total of 50 consecutive years. That’s something no other company can claim among passive income stocks.

For Fortis stock, right now you get that solid dividend at a yield of 3.26%. If you were to put a quarter of your TFSA toward the stock right now, that would produce annual income of $661 as of writing! That’s stable income you can look forward to for another 50 years and beyond.

CIBC

The best dividend stock of the Big Six Banks has to be Canadian Imperial Bank of Commerce (TSX: CM)(NYSE: CM). Among passive income stocks it’s a winner, providing investors with $6.44 per share per year as of writing. It continues to claim that top spot year after year, and likely will in the foreseeable future thanks to its strong and growing portfolio.

Right now, investing in CIBC stock gives you a yield of 4.41%. So if you were to put yet another quarter of your TFSA contribution room toward the company, that would give you annual income of $889 as of writing. And again, it’s had a stellar history of increasing dividends again and again.

Telus

Among the telecommunications companies, I still love TELUS (TSX: T)(NYSE: TU) for its growing and focused portfolio. Instead of getting into television, it’s focused on the wireless industry where its wireline business is booming. Furthermore, it’s now in the tech sector, all of which as helped support its solid dividend.

It’s now one of the passive income stocks offering a yield of 3.87% as of writing. That would make a quarter of your TFSA contribution room create $785 in annual income. Furthermore, it could be one of the growth stocks you’ll want to have on hand in the future.

Brookfield Renewable

Finally, Brookfield Renewable Partners LP (TSX: BEP.UN)(NYSE: BEP) may be down, but don’t count it out. The company continues to produce an incredible dividend despite the downturn in clean energy stocks. It’s now one of the passive income stocks proving that its eyes are on the future, and yours should be too.

Brookfield offers a substantial deal, with a dividend of 3.12% and trading at 2.22 times book value. Furthermore, its diversified portfolio of clean energy projects has set it up for decades of solid income. Investing another quarter of your TFSA would create $625 in annual income.