Imagine earning an extra $700 in your bank or investment account every year without lifting a finger. For Canadian investors looking to build a resilient retirement portfolio, the current market environment offers a unique opportunity to lock in high-yield income streams from top-tier energy stocks. If you have $10,000 sitting in cash, you don’t need to take wild risks to generate a reliable passive income stream. You just need to look at the cash-rich dividend heavyweights of the Canadian energy patch.
Here is how you can deploy $10,000 today to generate nearly $700 in annual passive income.
Gibson Energy stock
The first pillar of this passive income portfolio is Gibson Energy (TSX:GEI). While the stock has delivered a (still respectable) one-year total return of 10.6%, the real story for income investors is its generous dividend yielding 6.9% today.
Gibson Energy is a $4.1 billion infrastructure powerhouse known for its massive oil export terminals, including the Hardisty terminal. Think of this company as a toll booth for the energy sector. It gathers, stores, markets, and distributes crude and refined products. Recently, the company reported record throughput and sustained growth across its Canadian and U.S. terminals for the third quarter of 2025.
Why is this happening now? As oil prices soften, producers are reacting by increasing production volumes to stabilize their cash flows. This is great news for Gibson because volume growth translates directly into higher revenue for its terminals and marketing division. The company already handles about 25% of Western Canadian Sedimentary Basin marketing and operates the second-largest crude export terminal in the United States.
Financial discipline is key here. Gibson reported 10% year-over-year growth in distributable cash flow per share in the third quarter of 2025. Don’t let its 183% earnings payout ratio scare you. This metric is skewed by non-cash charges on its massive assets. Its dividend safety is accurately measured by its free cash flow payout rate. Gibson paid out 85% of its distributable cash flow over the past year, meaning the dividend is well-covered.
Furthermore, with over 95% of infrastructure revenues coming from “take-or-pay” and fee-for-service contracts, and a six-year streak of dividend raises, this is a payout you can trust.
Freehold Royalties stock: The royalty king
To complement the oil infrastructure play, let’s look to Freehold Royalties (TSX:FRU). This stock offers a juicy 7.2% annual dividend yield paid out as a $0.09 per share monthly dividend.
Freehold operates a brilliant, low-risk business model. It manages a portfolio of mineral titles and royalties on oil and gas properties across North America. The beauty of this model is its simplicity. Freehold incurs zero capital costs, zero operating costs, and zero project abandonment costs.
The royalties company simply collects checks from some of the best operators in the industry, including Canadian Natural Resources, ExxonMobil, and Devon Energy. This gives Freehold Royalties stock investors exposure to major conventional and shale basins with over 380 counterparties without the headaches of running an oil company.
Is the yield safe? In a third-quarter investor presentation, management stated the dividend is well supported as long as WTI oil prices remain at or above US$50 per barrel (WTI). If you believe oil will hold that level during your investment horizon, that 7.2% yield is yours to harvest.
How to invest $10,000 to earn $700 passive income
Here is the passive-income investment strategy: Split your $10,000 investment into two equal $5,000 positions as shown below:
| Stock to Buy | Recent Price | Number of Shares | Dividend Per Share | Total Dividend | Frequency | Total Annual Dividend |
| Gibson Energy (TSX:GEI) | $25.25 | 198 | $0.43 | $85.14 | Quarterly | $340.56 |
| Freehold Royalties (TSX:FRU) | $15.07 | 331 | $0.09 | $29.79 | Monthly | $357.48 |
| Total | $698.04 |
The initial deployment may generate $698.04 or more for 2026. Dividend growth and consistent reinvestment could grow the portfolio and compound your returns over time. Using the Rule of 72, the average 7% annual return this two-stock portfolio “promises” may double your portfolio in just over 10 years. Capital gains can shorten the doubling period.
By combining the stability of infrastructure with the high-margin cash flow of royalties, you can create a diversified income machine poised for long-term success.
