Need $500 in Passive Income Each Month? These 3 TSX Stocks Are Your Top Bets

While the market remains volatile, top dividend-paying stocks remain one of the best avenues to generate reliable passive income. Thankfully, the TSX has several top stocks that consistently pay dividends, regardless of market conditions, making them a solid investment to generate regular passive income.  

Against this background, let’s look at three Canadian stocks that can help you make worry-free dividend income.

NorthWest Healthcare Properties REIT

Real estate investment trusts, or REITs, are popular for their higher payout ratio, making them go-to avenues for passive income. With the REITs, investors could consider adding NorthWest Healthcare (TSX:NWH.UN) to their income portfolios. It owns a defensive portfolio of healthcare real estate infrastructure, which allows it to generate solid cash flows to support its payouts. 

Impressively, the REIT has a high-quality tenant base supported by government funding. Furthermore, it boasts of long-term leases (with a weighted average lease expiry term of close to 14 years), which adds visibility over its future cash flows. Also, NorthWest benefits from inflation-protected rents and a high occupancy rate (approximately 97%). 

The company’s internationally diversified real estate and strong fundamentals position it well to return cash to its shareholders. Meanwhile, its solid developmental pipeline augurs well for growth. It pays a monthly dividend and currently offers a high yield of 9.65%. 

Scotiabank

From REITs, let’s move toward banks. Large Canadian bank stocks are famous for paying and growing dividends for decades. What stands out is that a few of them have been paying regular dividends for over 100 years. Within the banking sector, Scotiabank (TSX:BNS) stock attracts the most due to its cheap valuation compared to peers, solid dividend payment history, and compelling dividend yield.

Scotiabank has been paying dividends uninterrupted since 1833. Meanwhile, it has grown its dividend at a CAGR of 6% over the past decade, reflecting a growing earnings base and a well-covered payout ratio.

Its diversified revenues, exposure to high-quality growth markets, and strong balance sheet will likely support its growth. Meanwhile, solid credit quality and efficiency savings will support earning growth and drive future dividend payouts. This bank stock currently offers a dividend yield of 5.97%.

Enbridge 

With a dividend yield of over 6.63% and a stellar history of growing its dividend (28 consecutive years), Enbridge (TSX:ENB) emerges as a perfect stock for passive-income investors. The energy company transports oil and gas and has a well-diversified revenue base to support dividend payments. 

This large-cap company’s utility-like resilient business model and continued investments in both conventional and renewable energy position it well to capitalize on energy demand and enhance its shareholders’ returns. 

Enbridge’s high asset utilization rate, multi-billion-dollar secured capital projects, and inflation-protected adjusted earnings before interest, tax, depreciation, and amortization will likely support its organic growth and dividend distributions. Meanwhile, its payout ratio is sustainable in the long term. 

Bottom line 

These companies have attractive dividend yields and well-covered payouts, making them solid investments to diversify your portfolio and earn steady passive income. However, investors should note that dividend payments are not guaranteed and should always focus on diversifying their portfolio to lower risk. 

Meanwhile, the table shows that a $27,000 investment in shares of each of these companies could generate about $500 in passive income every month.