Earning $2,000 a year in passive income from stock investing won’t require much. Also, it would take less than five years to achieve it in a Tax-Free Savings Account (TFSA). However, your investment choices must be high-yield dividend stocks.
TC Energy Corporation (TSX: TRP) and Superior Plus Corporation (TSX: SPB) are among TSX’s cash cow kings. With an average dividend yield of 7.535%, you only need a combined investment of $26,543 to generate $2,000 yearly. If you can’t invest the entire amount, maximize your TFSA annual contribution limits (assuming $6,500 annually) to hit the goal in 4.08 years.
Spinoff to create shareholder value
Pipeline operators are great income investments because their pipeline networks are important oil and natural gas vessels. TC Energy operates in the oil and gas midstream industry and has three complimentary energy infrastructure businesses, including natural gas and oil and liquids pipelines.
In the first six months of 2023, net income and net cash provided by operations increased 25.3% and 35.3% year over year to $1.6 billion and $3.6 billion, respectively. Because of the strong year-to-date performance, comparable EBITDA and segmented earnings grew 10% and 11% versus the same period in 2022.
The $48.2 billion company made headlines recently when it announced the Board’s approval to spin off the Liquids Pipeline and make it a standalone business. If the plan pushes through, the result would be two entities, possibly TC Energy (with Natural Gas Pipelines and Power & Energy Solutions) and a liquids pipeline company.
Management said each independent company will have a greater strategic focus, can enhance efficiencies, and pursue its own growth opportunities. More importantly, the spinoff unlocks synergies and creates shareholder value. The target date to complete the spinoff and produce two premium energy infrastructure companies is the second half of 2024.
Meanwhile, if you invest today, this top-tier energy stock trades at $48.19 per share and pays a juicy 7.72% dividend.
Extensive distribution platform
Superior Plus is cheaper ($9.87 per share) than TC Energy but has an equally mouth-watering dividend yield (7.35%). The $2.5 billion utility company distributes propane, compressed natural gas (CNG), renewable energy, hydrogen, and related products and services to customers in the U.S. and Canada.
In May 2023, Superior Plus acquired Certarus, a leading North American low-carbon energy solutions provider. The transformative acquisition adds muscle to Superior’s existing, extensive distribution platform and is the new growth driver. In the first half of 2023, net earnings jumped 91.6% year over year to $107.3 million.
Allan MacDonald, Superior Plus President and CEO, notes the solid contribution of Certarus to the solid operating results and Adjusted EBITDA growth. He adds the propane distribution businesses continue to deliver good results.
Superior Plus hasn’t missed a dividend payment since 1996. However, the dividend policy has changed from monthly to quarterly payments after March 2023.
For laid-back investors
TC Energy and Superior Plus are ideal for laid-back investors. With their payout frequency, the $2,000 passive income per year translates to $500 every quarter. Furthermore, you can generate more money if you accumulate more shares of these high-yield dividend stocks.
