Building a portfolio of TSX stocks doesn’t need to be complicated. If the right stocks are chosen, a portfolio of three stocks can generate an income that approaches $2,000 annually.
That can be done by spreading the investment across established dividend payers from different parts of the market. This also helps reduce the risk of relying too heavily on one company or one sector for dividend income.
In fact, investors can do it with $30,000 spread across three established TSX stocks. Here’s how.
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Telus brings the highest yield to the portfolio
The first stock for investors to consider is Telus (TSX:T). Telus is one of Canada’s best-known telecom stocks. Part of that appeal comes from its defensive nature and high dividend yield.
Telus provides an increasingly essential service. The need for the telecom’s wireless, internet, and communications services persists across economic environments. This allows Telus to continue paying that dividend, which currently yields 10.6%.
That yield makes Telus one of the top-paying options on the market. And it represents a large amount of income from a single stock.
Part of the reason for that ultra-high yield can be traced back to issues affecting not just Telus, but the entire telecom sector.
The higher interest rates that we’ve seen over the past several years have increased Telus’ debt obligations, and in turn put pressure on cash flow. This caused the stock price to decline and sent the yield soaring.
Fortunately, Telus has reined in costs and suspended its practice of dividend increases.
Enbridge adds steady cash flow from energy infrastructure
Another one of the top TSX stocks to consider is Enbridge (TSX:ENB). Enbridge is one of the largest energy infrastructure companies on the planet. The company operates pipelines and utilities, charged with delivering energy across North America.
Most of Enbridge’s revenue is derived from its pipeline business, which includes both crude and natural gas segments. The business generates steady cash flow supported by long-term contracts and regulated assets.
This allows Enbridge to invest in growth and pay out one of the best quarterly dividends on the market. As of the time of writing, Enbridge offers investors a yield of 4.9%.
Prospective investors should also note that Enbridge has provided investors with annual upticks to that dividend going back over three decades.
This makes Enbridge not only one of the top TSX stocks to consider for this three-stock portfolio, but a great option for any portfolio.
Bank of Nova Scotia adds banking exposure
It would be impossible to compile a list of the top TSX stocks and not mention at least one of Canada’s big bank stocks. That stock for investors to consider today is Bank of Nova Scotia (TSX:BNS).
Scotiabank isn’t the largest of the big banks, but it is the most international. Scotiabank’s international presence gives the bank another source of long-term growth beyond Canada.
In recent years, Scotiabank has shifted the focus of its international growth away from more volatile developing markets in Latin America.
In terms of income, Scotiabank has been paying dividends for nearly two centuries. As of the time of writing, the bank offers a yield of 3.7%. The bank has also increased its dividend annually for more than a decade.
The bottom line on these three TSX stocks
Together, these three TSX stocks create a simple income basket across telecom, energy infrastructure, and banking. Here’s how an equal $10,000 investment in each could generate annual income that approaches $2,000.
Note that prospective investors who aren’t ready to draw on that income yet can choose to reinvest the dividends from these TSX stocks. This allows any eventual income to continue compounding until needed.
| Company | Recent Price | No. of Shares | Dividend | Total Payout | Frequency |
| Telus | $15.75 | 634 | $1.67 | $1,058.78 | Quarterly |
| Enbridge | $79.73 | 125 | $3.88 | $485.00 | Quarterly |
| Bank of Nova Scotia | $122.57 | 81 | $4.56 | $369.36 | Quarterly |
| Total: | $1,913.14 |
