3 TSX Dividend Stocks to Buy for Passive Income

Passive income investors should look for three things before they chase yield: a payout that looks sustainable, a business that can keep generating cash in weaker commodity markets, and a valuation that doesn’t already assume perfection. In energy, that often means favouring producers with low-cost assets, disciplined spending, and room to reward shareholders without stretching the balance sheet. So let’s look at a few on the TSX today.

PEY

Peyto (TSX: PEY) stands out as one of the clearest passive-income picks on the TSX. It produces natural gas and liquids from Alberta’s Deep Basin, and it has built a reputation for keeping costs low while paying shareholders monthly. Over the last year, Peyto stock kept that story moving with stronger production, lower net debt, and another steady round of monthly dividends. It also reported solid reserve additions, which gives the income thesis a little more staying power.

The latest earnings looked strong enough to support that case. Peyto stock reported 2025 funds from operations (FFO) of $860.5 million, free funds flow of $375.2 million, and earnings of $418.6 million, or $2.06 per diluted share. Production rose 7% to 134,055 barrels of oil equivalent per day (boe/d), and the company returned $264.9 million, or $1.32 per share, in dividends while cutting net debt by $171 million. Peyto stock recently traded around a price-to-earnings (P/E) near 11.8. That still looks reasonable for a monthly payer with improving production. The risk is simple: natural gas prices can still swing around and pressure sentiment.

AAV

Advantage Energy (TSX: AAV) focuses on Montney natural gas and liquids production in Alberta, and over the last year it delivered record production, stronger reserves metrics, and better adjusted funds flow per share. Management also kept working to reduce exposure to AECO volatility, which matters for future cash generation.

The numbers improved nicely in 2025. Advantage generated adjusted funds flow of $381.6 million, up from $250 million in 2024, while net income attributable to shareholders rose to $53.1 million from $21.7 million. Total production averaged 78,267 boe/d, up 10% year over year, and debt fell to $549.1 million from $625.6 million. Shares recently traded around a trailing P/E of 30. That’s not cheap for an energy stock, and the lack of a regular dividend makes it the least obvious fit here. But if cash flow keeps growing, shareholder returns could become more attractive.

WCP

Whitecap Resources (TSX: WCP) looks like the most balanced income name of the three. It produces oil and gas across Western Canada, but it also gives investors a monthly dividend and a much bigger operating base than many peers. Over the last year, Whitecap completed and integrated the Veren deal, which helped reshape the company into a larger and stronger producer. That added scale, more liquids exposure, and more room for steady shareholder returns.

Its 2025 results backed that up. Whitecap delivered funds flow of $3 billion and free funds flow of $888.5 million, while petroleum and natural gas revenues rose to $5.6 billion from $3.7 billion a year earlier. The main risk is that integration work and commodity prices still need to cooperate.

Bottom line

If you want TSX dividend stocks for passive income, Peyto stock and Whitecap look like the cleaner choices right now, while Advantage adds a more growth-heavy twist for investors willing to be patient. Plus, the two offer income through dividends, in fact immense income with just a $7,000 investment.

Peyto stock brings monthly income with low-cost gas production, Whitecap offers scale and a solid yield, and Advantage gives investors a watch-list name that could become more income-friendly over time. For passive income today, I’d put Peyto and Whitecap first.