High-yield dividend stocks are top investments that generate regular income, even with a modest initial investment of $7,000. Moreover, several TSX stocks offer monthly payouts, making them attractive options for generating frequent income.
However, investors should look for companies with fundamentally strong businesses and sustainable payouts, ensuring a steady cash flow over time. Moreover, to maximize returns, utilizing a Tax-Free Savings Account (TFSA) is highly beneficial. By investing within a TFSA, investors can earn income that is completely tax-free, enhancing the overall income in the long term. Notably, the 2025 TFSA contribution limit is $7,000.
Against this background, here are two high-yield dividend stocks I’d choose to invest that $7,000 in to generate consistent, tax-free cash every month.
High-yield dividend stock #1
Whitecap Resources (TSX:WCP) is a compelling high-yield stock offering monthly payouts. The Canadian energy company focuses on acquiring and developing oil and natural gas properties and assets. Thanks to its presence in resource-rich regions and a solid portfolio of low-decline conventional assets, Whitecap generates consistent cash flow to support its monthly payouts.
Whitecap offers investors a monthly dividend of $0.061 per share, translating to a high yield of approximately 9.7% based on its closing price of $7.55 on May 5.
Looking ahead, Whitecap focuses on expanding its asset base, enhancing production efficiency, and controlling costs. These efforts will drive profitability and monthly dividend distributions. Moreover, the oil and gas company’s sound financial health, marked by a solid balance sheet, low leverage, and minimal maintenance capital requirements, provides resilience across commodity price cycles. This financial strength also positions Whitecap to capitalize on strategic opportunities, as evidenced by its recent merger announcement with Veren.
This merger will solidify Whitecap’s position in light oil and condensate production, particularly in resource-rich areas like Alberta’s Montney and Duvernay. Moreover, it will boost Whitecap’s profitability and enable it to return higher cash to its shareholders.
High-yield dividend stock #2
SmartCentres REIT (TSX:SRU.UN) is another TSX stock worth adding to a TFSA because of its high yield and steady payouts. The REIT’s resilient real estate portfolio, anchored by grocery-focused retail centres, benefits from consistently high occupancy and cash collection rates that drive its net operating income (NOI) and monthly dividend payouts.
Its monthly dividend payout is $0.154 per share, reflecting a high yield of 7.3% based on its recent closing price of $25.33.
SmartCentres’s in-place and committed occupancy is at a five-year high of 98.7%, with strong cash collections above 99% and notable rental growth. Moreover, with growing tenant demand for vacant space and strong retention, the REIT is well-positioned to deliver solid same-property NOI that will drive its future payouts.
The REIT is also expanding beyond retail into mixed-use developments, which will diversify its revenue and support future growth. Moreover, its vast underutilized landbank, strong balance sheet, and consistent rent growth will support its growth and monthly payouts.
Bottom line
These high-yield monthly dividend stocks are great options for generating reliable income. By investing $7,000 evenly across them, you could earn about $49.50 in tax-free income each month.
| Company | Recent Price | Number of Shares | Dividend | Total Payouts | Frequency |
| Whitecap Resources | $7.55 | 463 | $0.061 | $28.24 | Monthly |
| Smartcentres REIT | $25.33 | 138 | $0.154 | $21.25 | Monthly |
