Invest $20,000 in 2 TSX Stocks for $839 In Passive Income

Investing $20,000 in high-quality dividend-paying stocks can help generate worry-free passive income for years. Notably, many TSX stocks, especially large-cap firms, have a resilient earnings base and have consistently paid and raised their dividends in the past. Moreover, these stocks also maintain sustainable payout ratios, indicating they have the potential to generate sufficient earnings and cash flow to continue paying dividends in the coming years.

The combination of stability, sustainability, and income growth makes these dividend stocks appealing for investors who want to earn money while they sleep.

With that in mind, here are two TSX stocks that have the potential to turn your $20,000 investment into a dependable source of passive income for the long term.

Passive-income stock #1: Canadian Natural Resources

Canadian Natural Resources (TSX:CNQ) is one of the top dividend stocks that can generate steady passive income for years. This oil and gas company has raised its dividend for 25 years in a row. Further, CNQ’s dividend grew at a compound annual growth rate (CAGR) of 21% during that period. It currently pays a quarterly dividend of $0.588 per share, yielding 4.9%.

CNQ’s resilient dividend payouts stem from its diversified portfolio of long-life, low-decline assets and a balanced production mix, which enable it to deliver consistent cash flow across all market conditions. Beyond dividends, CNQ has also delivered stellar returns. Over the past five years, the stock has grown at a CAGR of over 32.9%, delivering overall capital gains of over 314%.

Thanks to the company’s high-quality reserves, focus on operating efficiency, and disciplined capital spending, its future payouts look sustainable. Further, CNQ’s low-risk, quick-to-execute, capital-efficient projects augur well for growth. In addition, Canadian Natural’s vast undeveloped land base provides years of drilling potential, strengthening its growth outlook.

Passive-income stock #2: Fortis

Fortis (TSX:FTS) is a top stock for stress-free passive income. This utility company’s rate-regulated operations generate stable revenues and resilient cash flows, irrespective of the market conditions. Additionally, its focus on energy transmission and distribution reduces its exposure to risks associated with power generation and commodity price swings.

Thanks to its defensive business model and predictable cash flows, Fortis has consistently paid and steadily increased its quarterly dividends for 52 years. Further, the company’s low-risk earnings and growing rate base position it well to keep increasing its dividend in the coming years. Currently, FTS offers a yield of 3.5%.

Fortis appears well-positioned to pay and increase its dividend. The company has laid out a solid $28.8 billion capital plan that focuses on expanding and modernizing its regulated assets. This will strengthen its long-term earnings growth.

As part of this strategy, Fortis anticipates its rate base to expand at a CAGR of 7%. This will translate into consistent earnings and dividend growth. Fortis projects its annual dividend will increase by 4% to 6% through 2030, making it a dependable income stock.

Beyond its current infrastructure investments, electricity demand is expected to climb meaningfully in the years ahead. High-growth sectors such as data centres are driving greater energy consumption, creating significant opportunities for Fortis.

Earn over $839 in passive income

Canadian Natural Resources and Fortis are compelling stocks for investors seeking to generate steady income for years. An investment of $20,000 in these stocks would generate approximately $209.93 in quarterly income, or over $839 per year.