3 Dividend Stocks That Make Your Money Work Harder So You Don’t Have to

These three under-the-radar TSX dividend names offer steady cash flow, high yields, and different strategies to generate reliable income.

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dividend stocks bring in passive income so investors can sit back and relax

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Key Points

  • KPT sells everyday tissue brands, generating steady cash flow and a roughly 7.7% yield, trading at about 17 times forward earnings.
  • DS writes covered calls on 15 blue‑chip Canadian stocks to pay monthly income, delivering an eye‑watering 10.2% yield.
  • TransAlta earns recurring contracted cash flow from renewables and long-term contracts, yielding about 1.1% while trading near 6.6x earnings.

We all get into investing for one thing: to make money. But that can sound way easier when it comes to actually investing. Investors need to sift through literally thousands of stocks on the TSX today to find those golden opportunities. And then once you do find them, investors need to keep fingers crossed that returns keep rising. Yet if you’re investing in dividend stocks, at least some of that worry will drift away. Today, let’s look at three dividend stocks that work hard for you, so that you can stop worrying.

KPT

KP Tissue (TSX:KPT) is one of those overlooked dividend stocks offering a business model built around everyday essentials, steady cash flow, and consistent dividends. KPT is essentially a holding company for the producer behind familiar household brands like Cashmere, Purex, Scotties, and SpongeTowels. These are products Canadians buy no matter what’s happening in the market, providing stability.

The dividend stock’s latest results show how well this approach holds up. In its second-quarter 2025 earnings, Kruger Products reported revenue of $536.1 million, up 5% year over year, and adjusted earnings before interest, taxes, depreciation, and amortization (EBTIDA) of $72.5 million, a 11% increase.

From a valuation standpoint, the dividend stock looks attractively priced. KPT trades at just 17 times forward earnings and 1.4 times book value. Furthermore, it provides a 7.74% dividend yield supported for investors. So, if you’re looking for value and stable income, KPT offers it.

DS

Dividend Select 15 (TSX:DS) is built for one purpose: to generate high, consistent monthly income from some of the strongest dividend-paying companies in Canada. DS is a split share corporation managed by Quadravest Capital Management. It holds a portfolio of 15 large, blue-chip Canadian dividend stocks. Companies that have powered Canadian portfolios for decades, known for reliable earnings, long dividend histories, and leadership across banking, energy, and telecom.

What makes it truly stand out is its income structure. The dividend stock uses an active covered call strategy, writing call options on some of its holdings to generate additional income from option premiums. This adds another stream of cash flow beyond dividends, allowing it to pay shareholders an eye-catching yield of 10.2% at writing, distributed monthly. Even better, those distributions are backed by some of the most reliable dividend payers in the country.

TA

TransAlta (TSX:TA) is a dividend-paying powerhouse in Canada’s energy sector that combines stability, growth, and cash flow. The dividend stock is one of Canada’s largest power generation companies, producing electricity from a diverse mix of assets that includes wind, hydro, natural gas, and energy storage. It operates across Canada, the U.S., and Australia, serving both industrial clients and utilities. Furthermore, the dividend stock is built on the foundations of stable, long-term contracts, but with strong exposure to renewable energy growth.

After years of restructuring and debt reduction, TransAlta is in its strongest financial position in over a decade. The diviend stock spent the last several years transitioning away from coal-fired power toward cleaner energy sources. That transformation, though slow, is now paying off. In its second quarter of 2025, TA reported adjusted EBITDA of $349 million, up from $316 million the year before, driven by higher generation and stronger pricing in renewables. Free cash flow came in at $157 million, more than enough to fund its generous dividend and reinvest in new projects.

The real reason TA makes your money work harder, though, is its recurring cash generation. Nearly 80% of its power output is backed by long-term contracts, often 10 to 20 years in length, with government entities and large corporations. Now it offers up a solid 1.11% yield as shares trade at just 6.6 times earnings.

Bottom line

So, how much could you get from investing in these three dividend stocks? Here’s what it might look like on the TSX today by putting $7,000 towards each.

COMPANYRECENT PRICENUMBER OF SHARESDIVIDENDTOTAL PAYOUTFREQUENCYTOTAL INVESTMENT
KPT$9.32751$0.72$540.72Annual$6,999.32
TA$23.84293$0.26$76.18Annual$6,985.12
DS$7.16977$0.67$654.59Annual$6,992.32

These are superior investments that work hard and offer one thing: stability. From essential services and investments in blue-chip companies, each offers a premium way to bring in income for life.

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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