TFSA: Invest $20,000 in These 4 Stocks and Get $1,100 in Passive Income

Investing in dividend stocks can be an excellent way to generate returns from the stock market. Building up a portfolio of reliable dividend-paying stocks in a Tax-Free Savings Account (TFSA) can help you enjoy those returns without incurring taxes.

The TSX boasts several high-quality TSX stocks that pay dividends to shareholders on a quarterly or monthly basis. Today, I will show you how a hypothetical $20,000 divided across two quarterly and two monthly dividend stocks can help you earn around $1,100 in tax-free passive income.

Real estate stocks

If you want to generate monthly returns like a landlord, the real estate sector might be the best space to look. However, it doesn’t mean you must have a ton of cash to buy investment opportunities. Through Real Estate Investment Trusts (REITs), you can generate monthly income like a landlord without the cash outlay or hassle of being one. REITs like Dream Industrial REIT (TSX:DIR.UN) and Slate Grocery REIT (SGR.UN) are the kind of stocks that can be ideal for this purpose.

Dream Industrial REIT is a $3.7 billion market-cap owner and operator of a portfolio of well-located and diversified industrial properties in key markets across Canada, Europe, and the US. The industrial buildings and warehouses in its portfolio are crucial for businesses across various sectors, regardless of the state of the economy.

Slate Grocery REIT is a $919.1 million market-cap trust that primarily owns grocery-anchored commercial properties across the US. It has a strong tenant base, boasting names with strong credit. Well-located properties across shopping centres throughout the US put Slate Grocery REIT in a unique position to continue generating solid returns.

Both REITs boast high occupancy rates, reliable monthly revenues, and offer high-yielding returns to investors.

Pipeline stocks

Where REITs offer monthly distributions from the real estate sector for investors, Enbridge Inc. (TSX:ENB) and TC Energy (TSX:TRP) offer investors exposure to the energy industry. Specifically, these companies operate extensive pipeline networks that serve oil producers throughout North America. Offering quarterly payouts, these two TSX stocks can be excellent investments to consider for dividend income.

Enbridge boasts a $159.7 billion market cap and has one of the largest and most complex pipeline networks in North America. It transports roughly 20% of the crude oil produced and consumed in the region, making it vital to the economy. The company has also been foraying into renewable energy to set itself up for success in a greener energy industry down the line.

TC Energy is also a leading energy infrastructure company with a network that connects Canada, the US, and Mexico. It is responsible for transporting around 30% of the natural gas consumed across North America.

Both stocks have solid fundamentals and long-term outlooks. Offering high-yielding dividends on a quarterly schedule, ENB stock and TRP stock can be good investments to consider.

Foolish takeaway

Suppose you have $20,000 to invest right now. That amount of money divided across these four dividend stocks can deliver a little over $1,100 per year without lifting a finger or incurring taxes on them. When investing, it’s important to remember that you should diversify capital across multiple assets to mitigate capital risk. The table below shows how much you can earn in tax-free dividends with a hypothetical $20,000 split across these four stocks.