Investing in top dividend stocks with high yields and reliable payouts can help you build a cash-gushing passive income portfolio with just $25,000. Further, Canadians can leverage the Tax-Free Savings Account (TFSA) to create a solid passive-income portfolio. Notably, dividends earned in a TFSA are tax-free. With this background, let’s explore a few Canadian stocks with fundamentally strong businesses and resilient payouts.
Firm Capital Mortgage Investment Corporation
Investors planning to build a cash-gushing portfolio could consider adding Firm Capital Mortgage Investment Corporation (TSX:FC) stock to their portfolios. This non-bank lender offers monthly payouts and currently distributes $0.078 per share as dividends. This translates into a high yield of over 8% near the current market price.
The financial services company offers short-term real estate mortgage loans. Moreover, it has expanded into real estate-related debt investments. Its diversified portfolio, conservative underwriting strategy, and market-to-market portfolio position it well to generate steady earnings that support its monthly dividend payments.
Moreover, Firm Capital targets markets underserved by large lending institutions, providing ample growth opportunities. Its real estate-backed assets and focus on loan syndication add stability to its financials and lower loan loss risks.
In addition, Firm Capital derives a significant portion of its earnings from interest, fees, and other income sources. These steady cash flows provide ample cash flows to support its dividend distributions, making it a dependable income stock.
SmartCentres REIT
SmartCentres REIT (TSX:SRU.UN) could be another valuable stock to enhance your portfolio’s income potential. This real estate investment trust (REIT) pays a monthly dividend of $0.154 per share. Based on its closing price of $24.22 on January 13, this translates into a high yield of 7.6%. The company’s resilient real estate portfolio, supported by core retail properties, generates solid same-property net operating income (NOI) and covers its payouts.
The REIT witnesses strong leasing demand, has a high occupancy of 98.5%, solid tenant retention, and a high rent collection rate. These attributes position SmartCentres REIT well to deliver solid NOI and pay regular cash.
The leasing momentum remains strong for its new build properties By the end of the third quarter of 2024, SmartCentres had successfully renewed or extended over 88% of leases set to mature in 2024. This steady leasing performance reflects its ability to maintain high occupancy. While the company’s retail business drives its financials, SmartCentres is poised for significant growth through its mixed-use properties.
The mixed-use properties will diversify its income streams, lower risk, and help it generate recurring revenue through multiple formats. Moreover, SmartCentres’s large land bank strengthens its growth prospects.
With a resilient portfolio and strategic development initiatives, SmartCentres REIT is well-positioned to deliver solid NOI and generate significant returns for its shareholders.
Earn $1,955 in tax-free passive income
Firm Capital Mortgage Investment Corporation and SmartCentres REIT are dependable stocks that pay steady monthly dividends. Their high yields make them compelling investments for generating tax-free passive income.
The table shows that an investment of $12,500 in each of these stocks can help you earn over $162.92 in tax-free income per month or $1,955 annually.
| Company | Recent Price | Number of Shares | Dividend | Total Payouts | Frequency |
| Firm Capital Mortgage Investment | $11.68 | 1,070 | $0.078 | $83.46 | Monthly |
| SmartCentres REIT | $24.22 | 516 | $0.154 | $79.46 | Monthly |
