Invest $15,800 in 2 TSX Stocks for $1,000 in Passive Income

Investing in top Canadian dividend stocks is an effective way to create a sustainable passive-income stream. Thankfully, the TSX has several fundamentally strong companies offering well-protected yields, making them ideal investments that can generate worry-free income for decades. Against this background, let’s explore the best TSX stocks that can help you earn $1,000 in passive income per year with an investment of $15,800.

The top utility stock

The leading Canadian utility stocks are reliable investments for earning stress-free dividend income. These companies benefit from a regulated business model that creates a stable base of recurring cash flow, supporting their dividend payouts regardless of market conditions.

Among the utility companies, Canadian Utilities (TSX:CU) is a compelling bet for its unmatched track record of dividend payments and growth. This utility giant has increased its dividend for an impressive 52 consecutive years, the longest by any publicly traded Canadian company. Moreover, it offers an attractive yield of 5.1%.

The company’s dividend payments are well-protected by its regulated and contracted assets that consistently generate steady earnings. Notably, the company continues investing in its regulated assets to expand its rate base, supporting future earnings and dividend distributions.

Canadian Utilities plans to invest about $4.6 to $5 billion in regulated utilities business through 2026. This will generate incremental earnings, enabling the company to pay higher dividends.

The utility company is also optimizing its energy infrastructure assets, exploring new growth avenues, and improving operational efficiency. These initiatives will strengthen the company’s earnings base, providing further room for dividend increases. In particular, Canadian Utilities’s focus on non-regulated opportunities, such as electricity generation, clean fuels, and energy storage, augurs well for growth. These high-growth areas will add diversification to its business and open the door to returns that could outpace traditional utility operations.

Overall, Canadian Utilities is poised to enhance its shareholders’ value through higher cash payouts.

A top REIT with a high yield

SmartCentres REIT (TSX:SRU.UN) could be another solid addition to your passive income portfolio. This real estate investment trust (REIT) is known for its reliable monthly payouts and high yield. The firm has a solid portfolio of mixed-use properties strategically located across high-traffic areas. Further, its primary focus on grocery-anchored shopping centers ensures a steady stream of operating income led by high-quality tenants and strong renewal demand, which supports higher rental income.

Thanks to its consistently growing net operating income, the REIT enhances its shareholder value through a monthly dividend of $0.154 per share. This reflects a high yield of 7.5% based on its closing price of $24.77 on January 06, 2025.

SmartCentres’s core retail properties continue to perform well, benefiting from high occupancy rates. Moreover, the success of its mixed-use development projects augurs well for growth. Looking ahead, its portfolio of high-traffic, value-oriented centres will continue to attract new and existing tenants. Furthermore, its strong cash collection rate, high retention, mixed-use development strategy, and large unused land bank position SmartCentres well to return significant cash to its shareholders.

Earn $1,000 in passive income

Canadian Utilities and SmartCentres REIT are excellent stocks for investors seeking steady passive income. Both have a strong track record of paying dividends and are offering high yields.

The table shows that if you invest $7,900 in each stock (a total of $15,800), you could earn $1,000 per year in passive income. Canadian Utilities generates a quarterly dividend of $103.28, or $413.12 per year. At the same time, SmartCentres REIT delivers a monthly dividend of $48.97, or $587.64 annually.