TFSA Passive Income: 3 Amazing Stocks That Earn $2,300/Year Combined

With inflation hurting your purchasing power, one should look for a secondary or passive income to lessen the impact of rising prices. One of the easiest and most convenient ways to earn a stable passive income is by investing in quality stocks that pay dividends at a healthier rate. With an investment of $10,000 in each of the following three stocks, an investor can earn over $576 every quarter through only dividends, translating into $2,300 yearly. Besides, he could also benefit from capital appreciation. Further, the investor can make these investments through a TFSA (tax-free savings account), thus saving on taxes. 

Enbridge

I am choosing Enbridge (TSX:ENB) as my first pick due to its consistent dividend hikes, high yield, and healthy growth prospects. The company earns substantial EBITDA (earnings before interest, tax, depreciation, and amortization) from regulated assets and long-term contracts. Besides, around 80% of its EBITDA is inflation-protected, thus shielding against rising prices. So, supported by its stable and predictable cash flows, the company has been paying dividends uninterruptedly since 1955 while raising the same at a CAGR (compound annual growth rate) of 10% for the previous 28 years.

With a quarterly dividend of $0.8875/share, an investor would earn $209 a quarter from his 216 shares (an investment of around $10,000). Meanwhile, the company has made a capital investment of $3 billion this year from its $24 billion secured growth program that spans through 2028. Besides, it is looking to strengthen its natural gas utility asset portfolio by acquiring three facilities in the United States for $19 billion. From these growth initiatives, the company’s management expects its adjusted EBITDA to grow at an annualized rate of 4–6% through 2025 and 5% thereafter. So, I believe Enbridge is well-equipped to continue dividend growth, thus boosting investors’ passive income.

BCE

Telecommunication companies enjoy healthy cash flows due to their recurring revenue streams. Besides, the growing demand for telecom services and the sector’s high entry barriers make them reliable dividend stocks to have in your portfolio. So, I have selected BCE (TSX:BCE), which has raised its dividends by over 5% annually for the last 15 years. It currently pays a quarterly dividend of $0.9675/share. So, an investor would earn $195 quarterly from his 184 shares (an investment of around $10,000). 

Meanwhile, BCE is expanding its 5G, 5G+, and broadband infrastructure to drive customer growth and boost its financials. Management expects to cover 85% and 46% of the country’s population with its 5G and 5G+ services, respectively, by the end of this year. Also, it is hopeful of adding 650,000 new broadband connections this year. Along with these initiatives, its efforts to improve efficiency and cut costs could boost its cash flows, thus making its future payouts safer.

Bank of Nova Scotia

My final pick would be the Bank of Nova Scotia (TSX:BNS), which has been paying dividends since 1833. The company has been under pressure over the last 12 months as rising interest rates have increased the fear of an economic slowdown, which could lead to higher delinquencies. Meanwhile, amid the sell-off, the company’s NTM (next 12 months) price-to-earnings multiple stands at an attractive 8.6. The pullback has also increased its dividend yield to 6.95%. An investor can earn $172.80 every quarter from his 163 shares (an investment of around $10,000).

Meanwhile, the financial services company’s capital and liquidity metrics are improving. Its Common Equity Tier 1 (CET1) capital ratio increased from 11.4% to 12.7% in the July-ending quarter, while its LCR (liquidity coverage ratio) improved from 122% to 133%, respectively. Further, the company last month announced it will slash its workforce by 3% amid its ongoing restructuring initiatives due to digitization, automation, and changes in customers’ preferences. So, I believe BNS would be an excellent buy at these levels.