Investing $20,000 in two TSX mid-cap stocks can feel a bit overwhelming. But when it comes to TSX stocks like Northland Power (TSX:NPI) and Lundin Mining (TSX:LUN), it can be a savvy strategy to generate passive income. Let’s explore how these companies have been performing and what the future might hold for investors.
Northland Power
Northland Power, a prominent player in the renewable energy sector, has been making waves with its recent financial performance. In the fourth quarter (Q$) of 2024, the TSX stock reported revenue from energy sales of $572 million — a slight decrease from $626 million in the same period the previous year. However, on a full-year basis, revenue increased to $2,346 million from $2,233 million in 2023. Net income also saw a positive shift, rising to $150 million in Q4 2024 from a net loss of $268 million in Q4 2023.
Looking ahead, Northland Power has issued its 2025 financial guidance. It expects adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to be in the range of $1.3 to $1.4 billion. This optimistic outlook is bolstered by ongoing projects in Poland, Taiwan, and Canada, which are anticipated to start contributing to earnings in 2025, with full realization by 2027.
For dividend enthusiasts, Northland Power offers a forward annual dividend rate of $1.20 per share, translating to a yield of approximately 6.18% at writing. This robust dividend yield is higher than the average of the bottom 25% of dividend payers in the Canadian market, making it an attractive option for income-focused investors.
Lundin Mining
Lundin Mining, a diversified base metals mining company, has also shown noteworthy performance. In Q4 2024, the TSX stock achieved revenue of $1.024 billion, with net earnings attributable to shareholders amounting to $101.2 million. This reflects a significant turnaround from a net loss in the same quarter of the previous year.
The TSX stock’s full-year results for 2024 are equally impressive, with revenue reaching $4.117 billion and record copper production of 369,067 tonnes. These figures underscore Lundin Mining’s operational efficiency and strong market position.
For investors eyeing dividends, Lundin Mining offers a forward annual dividend rate of $0.36 per share, yielding approximately 3.11%. While this yield is modest compared to Northland Power, it still provides a steady income stream for shareholders.
Earning income
By allocating $10,000 to Northland Power and $10,000 to Lundin Mining, investors can diversify their portfolios across the renewable energy and mining sectors. Based on the current dividend yields, this investment could generate significant income, as you can see below.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
| NPI | $19.10 | 524 | $1.20 | $628.80 | monthly | $10,000 |
| LUN | $11.35 | 881 | $0.36 | $317.16 | quarterly | $10,000 |
You would be earning $945.96 annually! Of course, it’s essential to consider that dividend yields are subject to change based on company performance and market conditions. However, both Northland Power and Lundin Mining have demonstrated resilience and growth potential, making them viable options for investors seeking passive income.
Foolish takeaway
Northland Power’s strategic projects in renewable energy are expected to enhance its earnings in the coming years. The TSX stock’s focus on sustainable energy solutions aligns with global trends toward cleaner energy sources, potentially leading to increased profitability and, consequently, higher dividends.
Similarly, Lundin Mining’s robust production figures and financial health position it well for future growth. As demand for base metals continues to rise, the company is poised to capitalize on market opportunities. This could translate into enhanced shareholder value.
Investing in Northland Power and Lundin Mining offers a balanced approach to generating passive income through dividends. Both TSX stocks showcased strong financial performances and have promising outlooks, making these worthy considerations for investors aiming to build a resilient and income-generating portfolio.
