Starting with $25,000 may not feel like a fortune, but when structured right, it can lay the foundation for a reliable and growing income stream. And to achieve that goal, it is important to pick the right dividend stocks — ones that combine stability, yield, and long-term upside. In a volatile 2025 market, where rate cuts remain uncertain and recession whispers persist amid the global trade war, choosing quality over hype matters more than ever.
In this article, I’ll show how I’d allocate a $25K portfolio around two outstanding dividend-paying stocks.
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TC Energy stock
That brings me to the first pick: TC Energy (TSX: TRP), a solid energy player that keeps rewarding shareholders through thick and thin. It’s one of North America’s largest energy infrastructure companies, best known for its massive pipeline network that delivers natural gas across Canada, the U.S., and Mexico. TRP stock is currently trading at $65.42 per share with a market cap of $68.6 billion and offers a juicy annualized dividend yield of 5.2%, paid quarterly.
The stock hasn’t exactly had a smooth ride lately, as it has dropped about 5% over the past three months. But if you zoom out, it’s still up nearly 37% over the past year.
TC Energy’s revenue in the fourth quarter of 2024 came in at $1.36 billion, down on a YoY (year-over-year) basis, and its adjusted earnings also slipped to $0.52 per share. Nevertheless, the company’s profit margins held up well due mainly to stable cash flows from its core pipeline business.
But what really sets TC Energy apart is its long-term focus on expanding its clean energy footprint with investments in renewables, energy storage, and carbon capture on top of its natural gas network. Given that, for dividend investors looking to build a foundation of reliable income with long-term upside, this energy giant fits the bill beautifully.
Bank of Montreal stock
As one of Canada’s oldest and most diversified financial institutions, Bank of Montreal (TSX: BMO) could be another dependable dividend stock with good long-term upside potential. It’s currently trading at $127.04 per share with a market cap of $92.4 billion and has a 5% annualized dividend yield. While the stock has dipped nearly 11% over the past month, it’s still up more than 13% over the past eight months.
The bank’s latest earnings show why it’s still a top pick. In the first quarter (ended in January) of its fiscal 2025, BMO’s revenue rose 21% YoY to $9.27 billion, while its adjusted net profit came in at $2.29 billion, up from $1.89 billion a year ago.
Interestingly, BMO is buying back shares, steadily increasing dividends, and expanding across North America through its Canadian and U.S. banking arms — brightening its long-term growth outlook. Overall, with strong capital levels and a focus on growth, BMO could be the kind of bank that could keep rewarding investors for years to come.
Here’s how to allocate $25,000 in these top dividend stocks
If I were putting together a $25K portfolio around these two top dividend stocks, I’d go for a balanced split — $12,500 into TC Energy and $12,500 into BMO. That way, you’re getting exposure to both energy and financials, locking in strong yields from both while also setting the stage for dependable, long-term growth.
