Investing in dividend stocks for passive income doesn’t need to be complicated. Canada has a wonderful mix of dividend stocks to choose from. With the right mix of reliable dividend stocks, a $20,000 investment can turn into $928 or more every year.
We’ll break down how these four Canadian dividend stocks can provide ample diversification, durable fundamentals, and an attractive total dividend yield.
An energy infrastructure stock for dividends
The first dividend stock I’d look to buy with $5,000 is TC Energy (TSX:PPL). This $83 billion market cap company yields 4.3% today. A $5,000 investment in TC Energy would earn $52.70 per quarter or $210.80 annualized.
TC has an excellent dividend growth record. It has raised its annual dividend for 25 consecutive years. It expects to keep growing that dividend by a 3–5% annual rate going forward.
TC operates a very steady business. It is a natural gas infrastructure leader in North America. Thirty percent of the gas consumed in North America flows through its assets. Nearly 98% of its operations are regulated or contracted. It’s a safe, albeit boring bet for passive income.
A retail real estate stock
The second dividend stock to buy is First Capital Real Estate Investment Trust (TSX:FCR.UN). This $4.2 billion stock earns a 4.6% yield today. A $5,000 investment in First Cap would earn $19.11 per month or $229.32 annually.
First Cap operates 136 urban-focused, grocery-anchored centres across Canada. This is a retail REIT with a focus on providing essential services to the local community. Its properties are in high demand. The REIT has 98% occupancy and has been enjoying high single digit rental rate growth over the past several years.
First Capital just announced its second consecutive dividend increase in the past two years. With an improving balance sheet and a strong portfolio of undervalued assets, this is solid bet for income and value.
A transport stock for monthly dividends
The third stock to buy is Mullen Group (TSX:MTL). This $1.4 billion market cap company pays a 5.1 % dividend yield. A $5,000 investment in Mullen Group would earn $21.35 monthly or $256.20 annually.
Mullen operates a network of transport and logistics businesses across Canada and the Western United States. While this can be a cyclical business, Mullen has done a good job diversifying into more stable market segments. This has allowed its business to be relatively resilient through some tough freight markets in the past few years.
Mullen does have a history of periodically raising its dividend, especially when markets improve. Its modest payout ratio suggests its dividend is safe.
A low-risk energy stock
A final stock to buy with $5,000 is Topaz Energy (TSX:TPZ). This $4.5 billion market cap stock yields 4.7% today. A $5,000 investment in Topaz would earn $58.14 quarterly or $232.56 annually.
Topaz operates a hybrid royalty/infrastructure company. It owns acreage in some of the top production regions in Western Canada. The company has an efficient operating platform and a smart acquisition strategy.
It has raised its dividend nine times since its initial public offering in December 2020. Energy stocks seem to be regaining momentum, and this is a low-risk dividend play to get exposure.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY |
| TC Energy | $79.88 | 62 | $0.85 | $52.70 | Quarterly |
| First Capital REIT | $19.83 | 252 | $0.07583 | $19.11 | Monthly |
| Mullen Group | $16.38 | 305 | $0.07 | $21.35 | Monthly |
| Topaz Energy | $29.12 | 171 | $0.34 | $58.14 | Quarterly |
Prices as of January 29, 2025
