TFSA: Invest $14,000 in This TSX Stock and Create $725.60 in Annual Passive Income

A $14,000 investment in high-quality dividend stocks can help build a steady stream of passive income. The strategy becomes even more powerful when those investments are held within a Tax-Free Savings Account (TFSA). Because any dividends earned or capital gains realized in a TFSA are completely tax-free, investors can keep the full value of their returns and allow their capital to compound more efficiently over time.

For investors seeking passive income, focus should be on TSX stocks with dependable dividend histories. These Canadian companies generate consistent and predictable cash flows and are better equipped to maintain and grow their distributions, even during periods of market volatility.

With these considerations in mind, here is a dividend-paying TSX stock that stands out as a strong investment for passive income investors. Based on its recent closing price and dividend yield, allocating $14,000 to this dividend stock could generate $725.6 in annual passive income.

Top passive income stock: Enbridge

Enbridge (TSX: ENB) stock is a compelling option for investors seeking dependable passive income within a TFSA. It offers an attractive dividend yield of 5.2% and has a long history of consistent distributions, making it a reliable income stock.

Notably, Enbridge has consistently paid dividends for more than 70 years and has shown a strong commitment to dividend growth. Since 1995, the energy infrastructure company has raised its dividend by about 9% per year. This sustained track record reflects ENB’s ability to navigate commodity cycles and varying economic conditions while continuing to return capital to investors.

Supporting Enbridge’s consistent dividend payments is its low-risk, diversified business model. The company generates cash flow from a highly diversified network of energy infrastructure assets, which helps reduce earnings volatility and drives distributable cash flow (DCF). A substantial portion of Enbridge’s EBITDA is derived from regulated operations or long-term take-or-pay contracts, limiting direct exposure to commodity price fluctuations and providing a predictable revenue base that supports its dividend program.

Further, much of Enbridge’s EBITDA is tied to inflation-adjusted agreements, which can help offset rising costs and support cash flow expansion over time.

Enbridge’s extensive energy infrastructure network further strengthens its position. The company’s pipelines and related assets connect major supply regions with key demand centres across North America. This results in strong asset utilization and positions the company to benefit from ongoing energy demand.

Overall, Enbridge is a top stock for TFSA investors seeking worry-free passive income for years to come.

Make $725.60/year in tax-free passive income

Enbridge is well-positioned to sustain its dividend growth streak in the years ahead. Its diversified revenue streams, high utilization of infrastructure assets, and largely low-risk, contract-based operating model support stable growth in distributable cash flow (DCF) per share, creating a reliable foundation for consistent dividend payments and future increases.

Over the past five years, Enbridge has returned roughly $38 billion to shareholders through dividends. Moreover, management expects to distribute between $40 billion and $45 billion during the next five years, supported by expanding regulated and contracted cash flows. Its targeted DCF payout ratio of 60% to 70% appears sustainable, allowing ENB to balance shareholder returns while retaining sufficient capital to fund future growth initiatives.

Enbridge is expected to benefit from accretive brownfield investments that expand or optimize existing infrastructure. These projects carry lower execution risk and benefit from favourable energy market fundamentals. In addition, Enbridge’s secured capital backlog of $39 billion provides long-term visibility into earnings growth and cash flow stability.

Beyond its traditional operations, Enbridge stands to benefit from structural shifts in the broader energy landscape. Rising electricity demand and ongoing energy transition initiatives are expected to create additional opportunities for infrastructure investment and expansion.

At the current dividend rate, an investment of $14,000 in Enbridge stock would allow an investor to acquire approximately 187 shares. Based on the company’s current payout, this position would generate about $181.39 in quarterly dividend income, or roughly $725.60 in annual passive income.