The Tax-Free Savings Account (TFSA) has become the most popular registered investment among Canadians in part due to its flexibility as well as the opportunity for investors to stash their capital gains without paying any tax whatsoever. However, this registered account is also a fantastic vehicle for passive-income generation.
Today, I want to explore how you can start with $30,000 and seek to generate $200/month in your TFSA. Let’s jump in.
Here’s a monthly dividend stock that offers big passive income
TransAlta Renewables (TSX:RNW) is the first dividend stock I’d look to snatch up in our TFSA today. This Calgary-based company owns, develops, and operates renewable and natural gas power generation facilities and other infrastructure assets in Canada, the United States, and Australia. Its shares have dropped 6% month over month as of early afternoon trading on June 14. The stock is still up 4.7% in 2023.
In the first quarter of fiscal 2023, the company saw total revenues fall to $119 million compared to $143 million in the first quarter of 2022. Meanwhile, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) dropped to $128 million over $139 million in the prior year.
This stock was trading at $11.92 per share at the time of this writing during Wednesday’s trading session. At this price, we can snatch up 850 shares of TransAlta for a purchase price of $10,132. The stock offers a monthly dividend of $0.078 per share. That represents a very tasty 7.8% yield. This purchase will allow us to generate monthly passive income of $66.30 in our TFSA.
TFSA investors can churn out monthly dividends with this top REIT
Allied Properties REIT (TSX:AP.UN) is a real estate investment trust (REIT) that is a leading operator of distinctive urban workspace in major metropolitan areas in Canada. This REIT has fallen month over month at the time of this writing. REITs have been a fantastic source of passive income for investors over the past 15 years. Allied Properties REIT is one of the heavy hitters in this space right now.
The REIT closed at $22.78 per share as of early afternoon trading on Wednesday, June 14. For our hypothetical, we can purchase 450 shares of Allied Properties for a total price of $10,250.10. This REIT offers a monthly distribution of $0.15 per share. The investment in this REIT will allow us to churn out monthly passive income of $67.50 in our TFSA.
One more dividend stock to snatch up for passive income in our TFSA
Sienna Senior Living (TSX:SIA) is the third and final dividend stock I want to target to make passive income in our TFSA. This Markham-based company provides senior living and long-term-care services in Canada. Its stock has dipped 1.2% so far on June 14. Shares of Sienna are up 4.1% so far in the year-to-date period.
Shares of Sienna Senior Living traded at $11.47 as of early afternoon trading on June 14. We can snatch up 850 shares of Sienna Senior Living for a purchase price of $9,749.50 at the time of this writing. This stock currently offers a monthly distribution of $0.078 per share, representing a monster 8.1% yield. That means we can now generate monthly passive income of $66.30 in our TFSA.
Bottom line
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY |
| RNW | $11.92 | 850 | $0.078 | $66.30 | Monthly |
| AP.UN | $22.78 | 450 | $0.15 | $67.50 | Monthly |
| SIA | $11.47 | 850 | $0.078 | $66.30 | Monthly |
These savvy investments will allow us to generate monthly passive income of $200/share in our TFSA going forward.
