Stock market investing can be an excellent approach to growing your wealth. Putting your money to work in the market can generate far more returns than merely parking it in a high-interest savings account. Dividend investing offers the best approach to earning inflation-beating returns and turning your investment capital into a passive-income stream.
Identifying high-quality stocks is essential when choosing dividend stocks to generate a passive income. To this end, we will discuss three TSX stocks you can consider investing in to create a reliable passive-income stream in your self-directed portfolio.
Enbridge
Enbridge (TSX:ENB) is a $100.20 billion market cap multinational pipeline and energy company headquartered in Calgary. Enbridge owns and operates one of the world’s most extensive and complex pipeline networks, transporting hydrocarbons across North America. From crude oil to natural gas and natural gas liquids, the company is responsible for transporting a significant amount of energy commodities used and produced in the region.
The essential nature of the services it provides gives Enbridge an excellent defensive appeal. Additionally, Enbridge is rapidly expanding its presence in the renewable energy industry, effectively future-proofing itself for a greener energy industry. As of this writing, Enbridge stock trades for $47.14 per share, distributing payouts to its investors at a juicy 7.76% dividend yield.
TC Energy
TC Energy (TSX:TRP) is another major North American energy company. Headquartered in Calgary, the $56.02 billion market capitalization energy transportation company owns and develops energy infrastructure in Canada, the U.S., and Mexico. The midstream energy company also has solid operations and a strong demand, reflected by its excellent performance. The company put $5.3 billion of projects into service last year, expanding its asset base to drive more growth in the coming years.
As of this writing, TC Energy stock trades for $54.00 per share, paying its investors at a juicy 7.11% dividend yield. Having raised its dividends for the last 24 years, it looks set to continue its dividend growth streak as more capital projects come into service this year and in the next.
Bank of Montreal
Bank of Montreal (TSX:BMO) is an $89.97 billion market capitalization Canadian multinational investment bank and financial services company. Founded in Montreal in 1817, it is one of the country’s oldest banks and one of the Big Six Canadian banks. When it comes to dividend investing, The Big Six have long been considered some of the best holdings for investors to own.
As macro headwinds impact BMO stock and its peers, its lower-than-usual share prices have inflated its dividend yield. As of this writing, Bank of Montreal stock trades for $124.03 per share, boasting a 4.87% dividend yield. Due to a wide economic moat, BMO stock looks set to ride the current wave of uncertainty and come out stronger on the other side.
- We just revealed five stocks as “best buys” this month … join Stock Advisor Canada to find out if Enbridge made the list!
Foolish takeaway
The right combination of blue-chip dividend stocks can help you generate a passive-income stream in your self-directed investment portfolio. Here is a look at how a hypothetical $29,771.39 investment across ENB stock, TRP stock, and BMO stock can generate just over $2,000 per year through dividends alone.
| Company | Recent Price | Number of Shares | Amount Invested | Annualized Dividends per Share | Annual Payout |
| Enbridge | $47.14 | 217 | $10,229.38 | $3.68 | $798.56 |
| TC Energy | $54.00 | 208 | $11,232.00 | $3.84 | $798.72 |
| Bank of Montreal | $124.03 | 67 | $8,310.01 | $6.04 | $404.68 |
| Total Amount Invested | $29,771.39 | Combined Total Annual Payout | $2,001.96 | ||
