Dividend Powerhouses: 3 Canadian Passive-Income Stocks for Every Portfolio

These stocks are a fantastic way to generate income over time while you sit back and watch your portfolio grow.

Amy Legate-Wolfe

Author Bio Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Her work can also be found at Canada's National Observer, where she writes on the business side of climate action. Before joining Motley Fool Canada, Amy wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Social Media Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published October 8, 2024 9:30 am EDT

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Anyone can create a strong passive-income portfolio in Canada, especially with the right dividend stocks. It’s all about picking companies that have a track record of reliable, growing payouts. With a mix of steady banks, dependable utilities, and even some energy and real estate investment trusts (REITs), you can build a portfolio that pays you consistently without needing to be a market expert. Plus, Canadian dividend stocks are known for their stability and tax-friendly benefits, thereby making them a fantastic way to generate income over time while you sit back and watch your portfolio grow.

Paper Canadian currency of various denominations — Source: Getty Images

Sun Life stock

Sun Life Financial (TSX: SLF) is a fantastic option for Canadian retirees looking for passive income due to its strong and consistent dividend payments, currently yielding around 4.15%. What makes SLF stand out is its diversified business. This includes wealth management, insurance, and asset management across Canada, the U.S., and Asia. In its most recent earnings report for the second quarter (Q2) of 2024, Sun Life posted a record underlying net income of $1 billion, up 9% from the previous year, thus reflecting strong performance across its wealth management and individual protection segments, especially in Canada and Asia. With $1.47 trillion in assets under management, Sun Life’s broad presence and steady growth make it a reliable option for income-seeking investors.

Looking ahead, Sun Life continues to focus on expanding in Asia and growing its wealth and asset management businesses. These have been key drivers of its recent success. Despite some headwinds in its U.S. Group Benefits division, Sun Life’s strategic focus is on high-growth markets and its strong financial position. With a return on equity of 18.1%, this suggests a positive future outlook. Sun Life’s 4% dividend hike in 2024 and its commitment to buy back shares make it a valuable choice for building a solid passive-income portfolio.

Dream Industrial

Dream Industrial REIT (TSX: DIR.UN) is a great option for passive-income seekers, especially for retirees looking for stable, reliable dividends. It offers a forward annual dividend yield of 5.04%, making it an attractive income stream. The REIT focuses on industrial properties, which are in high demand, and its portfolio continues to grow, with leasing spreads increasing by 56% over prior rents in 2024. This leasing momentum, combined with its high-quality properties in Canada and Europe, supports strong cash flow and future dividend potential.

In its recent Q2 2024 report, Dream Industrial achieved a 5% growth in net operating income (NOI) and demonstrated robust leasing activity, especially in its newly completed development projects. These projects, like the Mississauga redevelopment, are expected to contribute millions in NOI, further strengthening the REIT’s income. Additionally, the company’s strategic asset recycling plan, involving $100 million of dispositions, enhances its portfolio’s quality and boosts long-term returns.

Nutrien

Nutrien (TSX: NTR) is a strong option for passive income, particularly for those seeking exposure to the agricultural sector. With a forward dividend yield of around 4.31%, it provides a reliable income stream for investors. In its recent Q2 2024 results, Nutrien reported earnings per share (EPS) of $2.34. This beat analyst estimates, although revenue came in slightly below expectations at $10.16 billion. The company benefits from strong crop input margins and global demand for potash, thus making it a stable player in the essential fertilizers market.

Looking ahead, Nutrien’s future outlook remains solid, supported by increased sales volumes, especially in its potash segment, and cost-cutting initiatives. The company is also accelerating its margin improvement plan in Brazil to optimize cash flow. While there have been some challenges, particularly with fertilizer prices and market instability in Brazil, Nutrien’s diversified business model and focus on operational efficiency make it a valuable stock for those seeking long-term passive income.