TFSA: Invest $10,000 in These 4 Stocks and Get Over $400 of Passive Income

Wondering how much passive income you could earn by investing $10,000? Here’s a diversified portfolio of four quality dividend stocks.

| More on:
growing plant shoots on stacked coins

Image source: Getty Images

If you are keen for some passive income, you might as well earn it tax-free. When you invest inside of a Tax-Free Savings Account (TFSA), you don’t need to report any income and you don’t need to pay any income (that includes interest, dividends, and capital gains).

The tax saved by investing in the TFSA can really add up quickly. If you want to maximize returns, it is an excellent place to earn income. Want to deploy $10,000 for some easy and reliable passive income? Here are four diverse stocks that could collectively earn you $429 per annum.

A utility stock with a midstream business

AltaGas (TSX:ALA) offers an interesting combination of two businesses. Fifty-five percent of its business comes from a gas utilities business in the U.S. While 45% comes from a midstream and gas processing operation that spans across Western Canada.

This is an intriguing mix because the regulated gas utility provides stability that largely supports its dividend. However, it also provides industry-leading mid-to-high single-digit growth.

The midstream business is more cyclical and volatile. However, when energy demand and pricing rise, it can generate exceptional amounts of excess cash.

AltaGas stock yields 4%. The company has recently been growing its dividend annually by a high single-digit rate. Thus, $2,500 put into AltaGas stock would earn $25.29 of quarterly passive income, or $101.15 annually tax-free.

A top Canadian financial stock for passive income

National Bank of Canada (TSX:NA) is one of the best performing banks in Canada. Over the past five years, investors would have earned a 117% total return (with dividends reinvested).

While National is only the sixth largest bank in Canada, it has focused on low-risk markets (like Quebec), diversified products, and smart capital allocation. The bank has a good balance sheet and earns a sector-leading return on equity.

Likewise, National has delivered sector-leading dividend per share growth of 8.6% compounded annually. It has a dividend yield of 3.8%. A $2,500 investment in National would earn $23.32 quarterly, or $93.28 annually.

A REIT for monthly income

Another passive income stock for a TFSA is First Capital Real Estate Investment Trust (TSX:FCR.UN). It owns one of the largest portfolios of urban retail and grocery-anchored properties. Its portfolio is attractive due to the essential nature of many of its tenants (grocery, pharmacy, hardware, and banking).

Its properties are well-located in the heart of cities. Consequently, it has been enjoying mid-to-high single-digit rental rate growth across its properties. The REIT has a considerable land and asset footprint that could be developed. This is hardly factored into the stock price.

Right now, First Cap stock yields 5.7%. A $2,500 TFSA investment would earn $11.88 monthly, or $142.56 annualized.

A tech stock for passive income

Enghouse Systems (TSX:ENGH) is an interesting bet for income and a potential turnaround story. The company provides communication and asset management software around the globe.

Enghouse had a surge in demand during COVID-19 and then a decline just as rapid. Competition has been fierce and that has slowed growth in Enghouse’s core markets.

Fortunately, the company generates a tonne of excess cash, and it has been using that to make tuck-in acquisitions. It has over $250 million of net cash on its balance sheet, so it is primed for a big acquisition.

Until that happens, Enghouse has an attractive 3.5% dividend yield. A $2,500 investment in Enghouse would earn $21.58 quarterly, or $86.32 annualized.

COMPANYRECENT PRICENUMBER OF SHARESDIVIDENDTOTAL PAYOUTFREQUENCY
AltaGas$29.2885$0.2975$25.29Quarterly
National Bank of Canada$11122$1.06$23.32Quarterly
First Capital REIT$15.12165$0.072$11.88Monthly
Enghouse Systems$29.8883$0.26$21.58Quarterly
Prices as of April 14, 2024

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Robin Brown has positions in Enghouse Systems. The Motley Fool has positions in and recommends Enghouse Systems. The Motley Fool recommends First Capital Real Estate Investment Trust. The Motley Fool has a disclosure policy.

More on Dividend Stocks

Hour glass and calendar concept for time slipping away for important appointment date, schedule and deadline
Dividend Stocks

This 8% Dividend Stock Pays Cash Every Month

Earn monthly cash of $154 with this 8% dividend stock.

Read more »

oil tank at night
Dividend Stocks

Think Oil Is Going Higher? 3 Dividend Stocks to Buy Now

Looking for steady dividend growth? These three Canadian oil stocks could provide substantial dividend income in the coming years.

Read more »

Profit dial turned up to maximum
Dividend Stocks

This 7% Dividend Stock on the TSX is Worth Watching

With this superb TSX stock now trading at the bottom of its 52-week range, it's certainly a dividend stock you'll…

Read more »

edit Businessman using calculator next to laptop
Dividend Stocks

2 TSX Dividend Stocks to Buy While They Still Offer Great Yields

These top dividend-growth stocks now offer 7% dividend yields.

Read more »

Dots over the earth connecting the world
Dividend Stocks

1 Magnificent Dividend Stock Down 23% to Buy Right Now Near a Once-in-a-Decade Valuation

Patient investors could be happy with this dividend stock a few years down the road.

Read more »

Human Hand Placing A Coin On Increasing Coin Stacks In Front Of House
Dividend Stocks

Best Stocks to Buy in May 2024: TSX Real Estate Sector

Besides yielding stable monthly passive income, these top TSX real estate stocks could help you earn high returns on your…

Read more »

exchange-traded funds
Dividend Stocks

These 2 Dividend ETFs Are a Retiree’s Best Friend

Retirees looking for steady income will love these two Canadian dividend ETFs

Read more »

Bad apple with good apples
Dividend Stocks

Safe and Sound Stocks for Canadians: My Top 5 Choices

Want some of the best stocks for Canadians right now? Here's my top 5 list of stocks to buy today…

Read more »