How $20,000 Across 4 TSX Stocks Can Deliver $1,000 in Passive Income

These four high-yield dividend stocks are ideal to boost your passive income.

Key Points
  • SmartCentres and Enbridge for Reliable Income: SmartCentres offers a 6.12% yield with strong development opportunities, while Enbridge provides a 4.91% yield, both of which ensure stable income through robust business models.
  • Bank of Nova Scotia and Peyto for Growth and Returns: BNS provides a 3.88% yield, backed by steady dividends and strategic initiatives, while Peyto's 5.7% yield and expansion efforts promise attractive income and growth potential.

Passive income has become increasingly important in today’s uncertain economic environment. It offers financial stability, helps offset inflationary pressures, and accelerates progress toward long-term financial goals. Among the many income-generating investment options, high-yield dividend stocks are particularly attractive because they provide a steady stream of passive income and offer the potential for long-term capital appreciation.

With that in mind, let’s take a look at four TSX-listed dividend stocks that could help generate $1,000 in annual income from a $20,000 investment.

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SmartCentres Real Estate Investment Trust

SmartCentres Real Estate Investment Trust (TSX: SRU.UN) is a high-yielding TSX stock that I believe is ideal for income-focused investors. Backed by a portfolio of approximately 200 strategically located properties and a strong tenant base, the REIT maintains high occupancy levels across varying economic conditions. This stability supports predictable cash flow generation, enabling SmartCentres to deliver attractive and consistent distributions to its unitholders. The REIT currently pays a monthly distribution of $0.15 per unit, which translates into an appealing forward yield of 6.1%.

Looking ahead, SmartCentres has significant growth opportunities through its extensive development pipeline, which totals approximately 88 million square feet. Of these projects, 0.8 million square feet of properties are currently under construction. With demand for Canadian retail and mixed-use real estate remaining resilient, these development projects could drive higher rental income and strengthen the REIT’s financial performance over time. Supported by its stable operating base and long-term growth initiatives, SmartCentres appears well-positioned to continue rewarding investors with attractive income in the years ahead.

Enbridge

Another dividend stock that stands out for income-focused investors is Enbridge (TSX: ENB). The energy infrastructure giant derives approximately 98% of its adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) from regulated assets and long-term contracts. Also, about 80% of its earnings are protected against inflation through inflation-indexed mechanisms. This highly predictable business model generates stable cash flows, enabling Enbridge to pay dividends consistently for more than 70 years and increase its payout for 31 consecutive years. Also, its forward dividend yield is currently healthy at 4.9%.

The continued growth in oil and natural gas production across North America should support demand for Enbridge’s pipeline and energy infrastructure assets, creating opportunities for long-term growth. To capitalize on these opportunities, the company has identified approximately $50 billion in growth projects and plans to invest $10–$11 billion annually to advance its development pipeline. These investments should support steady earnings and cash flow growth, strengthening Enbridge’s ability to continue increasing its dividend in the years ahead. As a result, the stock remains an appealing choice for investors seeking reliable and growing passive income.

Bank of Nova Scotia

Third on my list is Bank of Nova Scotia (TSX: BNS), one of Canada’s largest financial institutions and a reliable dividend payer with a history dating back to 1833. Its diversified banking operations across multiple countries generate stable cash flows, supporting consistent dividend payments and regular dividend growth. Over the past decade, BNS has increased its dividend at an annualized rate of 4.5% and currently offers an attractive forward yield of 3.9%.

The bank is also taking steps to enhance long-term shareholder value by optimizing its operations and capital allocation. It is expanding its focus on North America while streamlining its exposure to select Latin American markets. In addition, BNS announced a new share repurchase program in April, authorizing the repurchase of up to 15 million shares. The bank could also benefit from a relatively elevated interest-rate environment, which supports lending profitability through healthy net interest margins. Given its reliable dividend, strategic initiatives, and strong financial position, BNS remains an attractive choice for income-seeking investors.

Peyto Exploration & Development

Another stock that stands out for income-seeking investors is Peyto Exploration & Development (TSX: PEY). The natural gas and natural gas liquids producer currently offers an attractive dividend yield of 5.7%, making it a compelling option for those seeking steady passive income. Peyto has also delivered strong long-term returns, generating average ROCE (return on capital employed) and ROE (return on equity) of 17% and 24%, respectively, over the past 27 years.

The company’s long-term outlook remains supported by its substantial resource base of 1.45 billion barrels of oil equivalent at the end of last year. It also continues to invest in expanding its production capacity, spending $150.5 million during the first quarter to drill 23 wells and acquire interests in 21 additional wells. Supported by its high-quality assets, disciplined capital allocation, and a favourable energy price environment, Peyto appears well-positioned to continue delivering attractive dividends to shareholders.

Investors’ takeaway

An investment of $20,000 split equally among these four stocks could generate $1,024.90 in annual passive income based on their current dividend yields. Given their reliable cash flow generation, attractive yields, and solid long-term growth prospects, these four TSX stocks represent compelling options for investors looking to build a reliable stream of passive income.

COMPANYRECENT PRICENUMBER OF SHARESINVESTMENTDIVIDENDTOTAL PAYOUTFREQUENCY
SRU.UN$30.21165$4,984.65$0.15417$25.44Monthly
ENB$78.9863$4,975.74$0.97$61.11Quarterly
BNS$117.4342$4,932.06$1.14$47.88Quarterly
PEY$25.26197$4,976.22$0.12$23.64Monthly
Total$1,024.90Yearly

Fool contributor Rajiv Nanjapla has no position in any of the stocks mentioned. The Motley Fool recommends Bank of Nova Scotia, Enbridge, and SmartCentres Real Estate Investment Trust. The Motley Fool has a disclosure policy.

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