Passive Income: How to Earn Safe Dividends With Just $10,000

These three dividend stocks with resilient business models and a growing earnings base can provide durable passive income.

| More on:
protect, safe, trust

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Investors seeking worry-free or relatively safe passive income could consider dividend stocks with the potential to sustain and increase payouts for years under all market conditions. Thankfully, the TSX has several such fundamentally strong companies committed to returning cash to their shareholders via higher dividend payments.

With this background, here are three Canadian stocks that could help you create a durable passive income portfolio with just $10,000. These stocks have relatively resilient business models and a growing earnings base and are known for their resilient payouts.

Enbridge

Speaking of safe dividend stocks, Enbridge (TSX:ENB) could be a reliable bet. This energy company has uninterruptedly paid dividends for over 69 years. Moreover, it raised its dividend for 29 years. The durability of its payouts reflects the company’s resilient business model, highly diversified revenue streams, a growing earnings base, and the ability to generate solid distributable cash flows (DCFs).

Created with Highcharts 11.4.3Enbridge PriceZoom1M3M6MYTD1Y5Y10YALL8 Apr 20204 Apr 2025Zoom ▾Jul '20Jan '21Jul '21Jan '22Jul '22Jan '23Jul '23Jan '24Jul '24Jan '252021202120222022202320232024202420252025203040506070www.fool.ca

Enbridge is well-positioned to capitalize on growing energy demand through its high-quality infrastructure assets and continued investments in conventional and renewable energy sources. Further, the company’s high asset utilization rate, long-term contracts, power-purchase agreements, and multi-billion-dollar secured capital projects will likely drive its DCF per share and payouts.

Enbridge’s management remains committed to rewarding its shareholders through higher dividend payouts. The company’s EPS and DCF per share are projected to increase at a mid-single-digit rate in the long term. This could lead to low-to-mid-single-digit growth in its dividend in the upcoming years. Besides solid dividends, Enbridge offers an attractive yield of 7.7% (based on the closing price of $47.57 on June 19).

Fortis

Utility companies are famous for offering dependable dividends. Their resilient payouts reflect a defensive business model and ability to generate predictable cash flows. Among top utility companies, Fortis (TSX:FTS) stands out for its stellar dividend payment history. It boasts a dividend growth history of 50 years and plans to increase it at a mid-single-digit rate in the upcoming years. Moreover, it offers a well-protected yield of 4.5%.

Created with Highcharts 11.4.3Fortis PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

This electric utility company’s resilient business model and growing rate base will help it generate solid cash flows. Further, as Fortis generates most of its earnings through regulated assets, its payouts are well-covered and reliable.

Fortis continues investing in regulated utility assets, which will likely expand its rate base and future earnings. Fortis plans to expand its rate base at a CAGR of 6.3% through 2028, enabling it to enhance shareholders’ returns through higher dividend payments.

Bank of Montreal

Passive income investors can rely on leading Canadian bank stocks. Top banks in Canada are famous for paying dividends for over a century. Bank of Montreal (TSX:BMO) is one among them, which makes it an attractive stock for earning safe passive income over the next decade.

Created with Highcharts 11.4.3Bank Of Montreal PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

This financial services company has the longest record of dividend payments in Canada. Indeed, it has paid dividends for over 195 years. Moreover, the financial services company increased its dividend at a CAGR of 5% in the past 15 years.

Over the medium term, Bank of Montreal expects its earnings to increase at a CAGR of 7 to 10%, enabling it to grow its dividend at least at a mid-single-digit rate during the same period. The bank’s diversified revenue base, expansion of its loan portfolio, solid deposit base, and focus on improving efficiency will enable it to grow its earnings and dividend payments. Bank of Montreal stock offers a lucrative dividend yield of about 5.4%.

Should you invest $1,000 in Canadian Natural Resources right now?

Before you buy stock in Canadian Natural Resources, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Canadian Natural Resources wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $20,697.16!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 29 percentage points since 2013*.

See the Top Stocks * Returns as of 3/20/25

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 Sneha Nahata has no position in any of the stocks mentioned. The Motley Fool recommends Enbridge and Fortis. The Motley Fool has a disclosure policy.

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Dividend Stocks

Dividend Stocks

3 Canadian REIT Stocks to Buy and Hold for the Next Quarter-Century

These three Canadian REITs trade cheaply and are highly reliable, making them some of the best stocks you can buy…

Read more »

A train passes Morant's curve in Banff National Park in the Canadian Rockies.
Dividend Stocks

1 Practically Perfect Canadian Stock Down 24% to Buy Now and Hold for Life!

CNR stock is a top Canadian stock for investors, especially with shares down on the TSX today.

Read more »

Canada national flag waving in wind on clear day
Dividend Stocks

The Best Canadian Stocks to Buy Right Away With $30,000

If you have $30,000 you're willing to invest, these are some of the first Canadian stocks to consider on your…

Read more »

rail train
Dividend Stocks

What to Know About Canadian Pacific Railway Stock for 2025

CP stock has now gone through a major merger, so what do investors have to look forward to?

Read more »

ways to boost income
Dividend Stocks

Top Canadian Value Stocks I’d Buy for Dividend Growth and Appreciation

If you are looking for income and capital appreciation, here are three Canadian value stocks for a great total return…

Read more »

coins jump into piggy bank
Dividend Stocks

The Smartest Canadian Stock to Buy With $2,000 Right Now

The company’s powerful combination of growth, income, and value, positions it well to deliver solid returns, making it a smart…

Read more »

Transparent umbrella under heavy rain against water drops splash background. Rainy weather concept.
Dividend Stocks

This 10.6 Percent Dividend Stock Pays Cash Every Single Month

Are you looking to invest for a rainy day? This 10.6% dividend stock pays cash every month, irrespective of the…

Read more »

A worker gives a business presentation.
Dividend Stocks

Market Dip: Opportunity or Risk This April?

This market dip might have investors worried, but should they be excited instead?

Read more »