Invest $20,000 in 2 TSX Stocks for $8,669.88 in Passive Income

These passive-income stocks provide not just dividends, but way more through a globally diversified portfolio.

| More on:
Man holds Canadian dollars in differing amounts

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

Investing $20,000 into two carefully chosen TSX stocks is a strategy that could generate significant passive income over time. Combining global exposure with reliable dividends is a strong way to create long-term growth. Today, let’s look at investments balance risk and reward, making excellent choices for both income-focused and growth-oriented investors.

Created with Highcharts 11.4.3Vanguard Ftse Global All Cap Ex Canada Index ETF + Canadian Imperial Bank Of Commerce PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

VXC

First, let’s dive into Vanguard FTSE Global All Cap ex Canada Index ETF (TSX:VXC). This exchange-traded fund (ETF) offers a diversified portfolio of global equities, excluding Canadian companies — perfect for those looking to expand beyond domestic markets. It captures large-, mid-, and small-cap stocks from developed and emerging markets worldwide. With its year-to-date return sitting at an impressive 28.75% as of writing, it’s evident that this ETF is riding the wave of global growth. Its holdings include heavyweights that give you exposure to tech giants, financial leaders, and industrial innovators. Plus, VXC provides a yield of 1.39% — a modest, steady income source alongside capital appreciation.

What sets VXC apart is its diversification. Spreading your investment across sectors like technology (25% in VXC), financial services (15%), and healthcare (11%) reduces the risk associated with any single market downturn. This ETF is also known for its low expense ratio, which ensures you keep more of your returns. With global markets rebounding from previous economic headwinds, VXC is well-positioned for long-term growth. Thus making it a cornerstone for anyone seeking a robust, low-maintenance investment vehicle.

CIBC

Now, consider pairing this with Canadian Imperial Bank of Commerce (TSX:CM), a top-tier dividend-paying stock. As one of Canada’s “Big Five” banks, Canadian Imperial Bank of Commerce is a financial powerhouse with a rich history of rewarding its investors. Currently trading at $94.42 per share at writing, CM boasts a dividend yield of 4.02%. A compelling figure for income seekers. Its forward annual dividend rate of $3.60 and a payout ratio of 51.66% suggest stability and room for growth. Plus, with quarterly revenue growth of 19.6% and quarterly earnings growth of 25.6% year over year, CM is not just a dividend player but also a growth story.

CM’s financial health is backed by solid fundamentals. The bank reported a trailing 12-month revenue of $22.7 billion and a profit margin of nearly 30%. With a trailing price-to-earnings (P/E) ratio of 12.94 and a forward P/E of 12.17, the stock remains attractively valued. Its return on equity (ROE) of 12.37% reflects strong management effectiveness. And this bodes well for sustaining dividend payments and navigating economic uncertainties. CM has also weathered economic downturns effectively, proving its resilience and capacity to reward long-term investors.

Pair it!

So, why pair these two investments? VXC offers exposure to global markets, capitalizing on international growth trends, while CM anchors your portfolio with steady, predictable income and Canadian market stability. Together, they form a balanced approach: one provides global diversification and growth potential, and the other delivers reliable passive income through dividends.

Imagine reinvesting the dividends from CM and VXC. With compound growth, your $20,000 initial investment could grow exponentially over the years. VXC’s global diversification minimizes risk, while CM’s consistent dividend payouts provide a safety net, creating a strategy that works for investors seeking both passive income and long-term wealth accumulation. In fact, here’s what you could earn in dividends and returns should shares climb by the same amount, with $10,000 towards both passive-income stocks.

COMPANYRECENT PRICENUMBER OF SHARESDIVIDENDTOTAL PAYOUTFREQUENCYINVESTMENT
VXC – now$66.25151$0.92$138.92quarterly$10,000
VXC -28%$84.80151$0.92$138.92quarterly$12,804.80
CM – now$94106$3.60$381.60quarterly$10,000
CM – 54%$144.76106$3.60$381.60quarterly$15,344.56

Bottom line

In the current market, VXC and CM represent a perfect duo for investors who want the best of both worlds in terms of global market exposure and domestic dividend reliability. By allocating $10,000 to each, you tap into a global portfolio while ensuring consistent cash flow from one of Canada’s most reliable financial institutions. In fact, it could create a total passive-income stream of $8,669.88, combining returns and dividends! Over time, this blend of growth and income could truly unlock massive passive-income potential.

Should you invest $1,000 in CIBC right now?

Before you buy stock in CIBC, 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 CIBC 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 Amy Legate-Wolfe has positions in Vanguard Ftse Global All Cap Ex Canada Index ETF. The Motley Fool has no position in any of the stocks mentioned. 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

A close up color image of a small green plant sprouting out of a pile of Canadian dollar coins "loonies."
Dividend Stocks

I’d Put $15,000 in These 3 Dividend-Growth Champions for Increasing Income Potential

Want to offset some volatility? Here are three defensive dividend-growth champions that can generate a juicy yield right now.

Read more »

Blocks conceptualizing Canada's Tax Free Savings Account
Dividend Stocks

Transform Your TFSA Into a Cash-Creating Machine With $7,000

Discover how the Tax-Free Savings Account can be your golden goose for generating cash without losing your investment.

Read more »

monthly desk calendar
Dividend Stocks

How I’d Invest $10,000 in Canadian Value Stocks for Monthly Dividend Income

A $10,000-diversified portfolio of value stocks focusing on dividend safety, yield, growth, and payment schedules can provide a reliable source…

Read more »

a person watches a downward arrow crash through the floor
Dividend Stocks

Is This Correction Your Chance? Top 4 Canadian Dividend Stocks on Sale

Stocks may be down, but now is your chance to get some of these top dividend stocks on sale.

Read more »

Confused person shrugging
Dividend Stocks

Where to Invest $2,500 in the TSX Today

These TSX stocks offer attractive dividends and a shot at decent upside on a rebound.

Read more »

Pile of Canadian dollar bills in various denominations
Dividend Stocks

Invest $25,000 in These Dividend Stocks for $1,956.66 in Annual Passive Income

Dividends stocks can make a huge difference, even if shares don't move an inch. And these might be the best.

Read more »

Pile of Canadian dollar bills in various denominations
Dividend Stocks

Got $5,000? 5 Income Stocks to Buy and Hold Forever

These income stocks have a solid dividend-payout history that can help you earn stress-free passive income.

Read more »

grow money, wealth build
Dividend Stocks

Why I’d Invest $10,000 in This Undervalued Dividend-Growth Stock for Decades of Income

This undervalued dividend stock offers a high yield of over 8% and can help you earn more than $200 in…

Read more »