If you’re looking to invest $25,000 in the TSX and generate reliable passive income, it’s important to find stocks that offer a balance of strong dividends, stable earnings, and future growth potential. Two mid-cap stocks that fit this description are Granite Real Estate Investment Trust (TSX:GRT.UN) and Capital Power (TSX:CPX). Both companies have a solid track record of paying dividends and offer compelling long-term prospects, making them attractive for investors looking to build passive income.
Granite
Granite REIT is a leader in the industrial real estate sector, owning and managing logistics, warehouse, and manufacturing properties across North America and Europe. With 143 properties covering approximately 63.3 million square feet, the company benefits from long-term leases with high-quality tenants, ensuring a steady stream of rental passive income. This stability is crucial for maintaining and growing dividends over time, a key factor for passive-income investors.
Granite’s most recent quarterly earnings report showed strong growth, with net operating income reaching $119.6 million, up from $109.2 million in the same period last year. Net income saw an even more dramatic rise, climbing from $33.1 million to $111.6 million year over year. This impressive performance was driven by new development projects and favourable leasing activity, demonstrating Granite’s ability to expand despite economic uncertainties.
The company recently announced a dividend increase of 3.03%, bringing its annualized distribution to $3.40 per unit starting in December 2024. This move reflects management’s confidence in the company’s financial health and its commitment to rewarding investors. With a forward dividend yield of approximately 4.85%, Granite REIT remains a strong option for those looking to generate consistent passive income.
Capital Power
Capital Power, however, is a major Canadian power producer with a diverse portfolio of energy assets. Operating 32 facilities across North America, the company generates approximately 9,300 megawatts of power, providing a stable source of revenue. Capital Power has been expanding its clean energy portfolio, ensuring that it remains competitive as the transition to renewables accelerates.
In its latest earnings report, Capital Power reported adjusted funds from operations of $315 million and net income of $178 million. The passive income stock also achieved a record-high electricity generation of 11,001 gigawatt-hours during the quarter, largely due to increased output at its U.S. natural gas plants. Despite a slight decline in revenue of 8% year over year, the company managed to keep costs under control and remains well-positioned for future growth.
Capital Power has also been investing in large-scale energy projects, including the Genesee Repower 1 and 2 developments. These should be operational by the end of 2024. The projects will help reduce emissions while increasing power capacity, aligning with the company’s long-term strategy to provide cleaner and more efficient energy solutions.
For dividend investors, Capital Power has been a reliable performer. The company increased its dividend by 6% in July 2024, bringing its forward annual dividend yield to approximately 4.91%. With a payout ratio of just over 60%, the passive-income stock has plenty of room to maintain and even grow its dividend payments in the future, making it an appealing choice for passive-income investors.
Bottom line
If you were to invest $12,500 in each of these stocks, the passive income potential is substantial. In fact, let’s take a look below.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
| GRT.UN | $69.35 | 180 | $3.40 | $612 | quarterly | $12,500 |
| CPX | $52.70 | 237 | $2.61 | $618.57 | quarterly | $12,500 |
That adds up to a total of $1,230.57 in passive income annually, a solid return for those looking to build long-term wealth. Investing in dividend stocks like Granite REIT and Capital Power is a great way to generate reliable income while benefiting from capital appreciation. Both companies have strong financials, stable revenue streams, and a history of rewarding shareholders. For those looking to make the most of their $25,000 investment, these two TSX stocks offer a compelling mix of income and growth potential.
