Buy 500 Shares of 2 TSX Stocks for $2,736/Year in Passive Income

These two Canadian stocks with a stellar dividend payment and growth history can help investors start a worry-free passive income stream.

| More on:
Two seniors walk in the forest

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 a steady passive income stream can turn to dividend stocks with a stellar dividend payment and growth history. Fortunately, the TSX has several companies that pay regular dividends, and their payouts are reliable and well-protected by their fundamentally strong businesses.

Against this backdrop, let’s look at two Canadian stocks with relatively resilient business models and a growing earnings base. These TSX stocks have consistently paid and increased their dividends irrespective of market conditions, making them dependable passive income stocks.

Further, investors can earn $2,736/year in passive income if they buy 500 shares of each of these two TSX stocks.

Enbridge

Investors can easily rely on Enbridge (TSX:ENB) stock for passive income. The oil and gas transporter is famous for its durable payouts and a long history of dividend growth. For context, Enbridge has paid dividends for over 69 years. Moreover, it has raised its dividend for 29 years at a compound annualized growth rate (CAGR) of 10%. In addition to its stellar payouts, Enbridge stock offers a high and well-protected yield of about 7.5%.

Enbridge remains committed to rewarding its shareholders with higher dividends in the coming years. The energy company will likely benefit from the higher utilization of its assets, which will support its earnings growth and drive distributable cash flows (DCFs). In addition, the company’s long-term contractual arrangements add a layer of stability to its cash flows. Further, its investments in renewable and conventional energy sources, multi-billion-dollar secured capital projects, and strong balance sheet bode well for future growth.

The energy infrastructure company expects its earnings and DCF to increase at a mid-single-digit rate in the long term, enabling it to grow its annual dividend at a similar pace in future years. Moreover, Enbridge maintains a target payout ratio of 60 to 70% of DCF, which is sustainable in the long term. 

Canadian Utilities

Canadian utility companies are famous for offering dependable dividends owing to their regulated asset base, defensive business model, and ability to generate predictable cash flows. Canadian Utilities (TSX:CU) stands out in the utility sector for the durability of its payments and its ability to grow its dividends. It boasts an impressive dividend growth history of 52 years, the longest by any Canadian company. This shows the resiliency of its payouts and its commitment to enhance shareholder value.

Canadian Utilities has a resilient business model and growing base of regulated utility assets, which helps it to generate predictable cash flows. This enables the company to offer uninterrupted dividend payments. Further, its regulated utility assets ensure that its payouts are well-protected.

The company is expanding its rate base by investing in regulated utility assets. This positions Canadian Utilities well to return higher cash to its shareholders. Moreover, the company’s focus on investing in commercially secured energy infrastructure capital projects augurs well for growth.

Adding to the positives, Canadian Utilities stock provides an attractive yield of about 6% near the current levels.

Bottom line 

Both Enbridge and Canadian Utilities stocks are dependable investments for earning worry-free passive income. The table shows that buying 500 shares of each of these stocks can help you earn over $683 every quarter, or about $2,736/year.

CompanyRecent PriceNumber of SharesDividendTotal PayoutFrequency
Enbridge$48.49500$0.915$457.5Quarterly
Canadian Utilities$29.82500$0.453$226.5Quarterly
Price as of 07/05/2024

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

Before you buy stock in Canadian Utilities, 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 Utilities 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. 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

Canadian Red maple leaves seamless wallpaper pattern
Dividend Stocks

5 Canadian Dividend Stocks to Buy and Hold for the Next 20 Years

These Canadian stocks have paid dividends for decades, making them reliable investments to generate regular passive income.

Read more »

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 »