The Canada Pension Plan (CPP) is a taxable retirement benefit that aims to replace a portion of your income in retirement. In 2024, the average CPP payout is just $758.32 a month, while the maximum payment is $1,364.60.
The CPP payout depends on several factors, such as the age at which you begin these contributions and the average income throughout your working life.
Even if you are eligible for the maximum CPP payment, it’s evident you need to supplement the retirement benefit with other income streams.
One way to boost your CPP pension in 2024 is by investing in blue-chip dividend stocks. Here are two TSX dividend stocks you can consider buying to generate a recurring stream of passive income for life.
Enbridge stock
Among the most popular dividend payers in Canada, Enbridge (TSX: ENB) offers you a forward yield of 7.65%. Valued at a market cap of more than $100 billion, Enbridge is a pipeline and utility operator that has delivered annual returns of over 11% in the last two decades, outpacing the TSX index and peers by a wide margin. Enbridge is an energy infrastructure giant that enjoys a wide economic moat, resulting in recurring cash flows and widening dividend payouts.
Last year, Enbridge announced plans to acquire three natural gas utilities from Dominion Energy for US$14 billion. The big-ticket acquisition will create the largest natural gas utility platform in North America, with seven million customers.
Enbridge recently closed its first utility purchase from Dominion Energy. It acquired The East Ohio Gas Company, diversifying its business and enhancing its overall cash flow profile. The other two acquisitions are on track to close by the end of 2024, following which Enbridge will earn 22% of its EBITDA (earnings before interest, tax, depreciation, and amortization) from the gas utility sector.
Enbridge forecasts to grow its EBITDA between 7% and 9% annually through 2026, which should support further dividend hikes. The TSX energy stock has increased its dividends by 10% annually in the last 29 years, enhancing the yield at cost significantly.
Sun Life Financial stock
Another Canadian blue-chip stock is Sun Life Financial (TSX: SLF), which offers you a forward yield of 4.3%. Despite an uncertain macro environment in 2023, Sun Life increased earnings by 10% year over year to $983 million in the fourth quarter (Q4) of 2023.
Sun Life Financial is a well-diversified financial services heavyweight and generates a significant portion of its earnings from the insurance business, which is fairly recession resistant.
The company’s strong earnings and disciplined financial management allowed Sun Life to end Q4 with a return on equity of 18.4%, above its financial objective.
A strong performance in 2023 meant Sun Life maintained a strong capital position with a LICAT (Life Insurance Capital Adequacy Test) ratio of 149%. As per regulatory guidelines, companies are required to maintain a core LICAT ratio of 55% and a total LICAT ratio of 90%.
Priced at 10 times forward earnings, SLF stock also trades at a discount of 6% to consensus price target estimates.
The Foolish takeaway
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY |
| Enbridge | $47.84 | 1,045 | $0.915 | $956 | Quarterly |
| Sun Life Financial | $72.40 | 691 | $0.78 | $539 | Quarterly |
An investment of $100,000 distributed equally in these two dividend stocks should help you earn roughly $6,000 in annual dividends. You should identify other quality dividend stocks with an attractive yield and diversify your equity portfolio, which lowers overall risk.
