Here’s How I’d Grow a $14,000 TFSA Into $711 in Passive Income

A simple two-stock TFSA portfolio could deliver steady dividend income today while offering room for that income to grow over time.

Key Points
  • A $14,000 TFSA could become a steady source of passive income with the right dividend stocks.
  • Peyto Exploration & Development (TSX:PEY) combines a 5.8% dividend yield with strong earnings and production growth.
  • Brookfield Infrastructure Partners (TSX:BIP.UN) offers dependable cash flow, a 4.5% yield, and long-term growth potential.

Do you want to receive passive income while doing nothing more than holding shares inside your Tax-Free Savings Account (TFSA)? That income may start small, but it can grow when dividends are reinvested and companies raise their payouts.

While dividend income from a $14,000 investment will not replace a salary, it could certainly lay the foundation for a much larger passive-income portfolio. I would divide that money between one Canadian natural gas producer and one global infrastructure operator. Together, their current yields could generate around $711 annually.

In this article, I’ll spotlight these two Canadian dividend stocks and explain why their fundamentals support an optimistic long-term income outlook.

senior relaxes in hammock with e-book

Source: Getty Images

Peyto stock

The first income stock I would add to this TFSA is Peyto Exploration & Development (TSX: PEY). This company produces natural gas and natural gas liquids in Alberta. Its shares recently traded at $25.52 each, giving it a market value of $5.2 billion. PEY stock has climbed 36% over the last year and still offers a juicy 5.8% annualized dividend yield.

Peyto’s strong stock performance has mainly been supported by its stronger production, higher realized gas prices, and solid financial results. The company’s first-quarter production rose 10% year-over-year (YoY) to 147,513 barrels of oil equivalent per day. Its funds from operations jumped 30% YoY to $293 million, while earnings surged by 50% to $171 million.

Peyto also generated $139.7 million of free funds flow last quarter and reduced net debt by $89.2 million. The realized natural gas price after hedging reached $4.7 per thousand cubic feet, helped by market diversification and hedging gains.

The natural gas producer plans to invest between $450 million and $500 million in 2026 to add new production. These strong results and operations make Peyto an attractive higher-yield stock for investors seeking consistent passive income inside a TFSA.

Brookfield Infrastructure stock

To balance that energy exposure, I would pair Peyto with Brookfield Infrastructure Partners (TSX: BIP.UN). It owns utilities, transport, midstream, and data assets across several global markets. After climbing 29% over the last 12 months, its units now trade at $56.66 each, with a market cap of $25.9 billion. At this price level, the stock provides a 4.5% annualized distribution yield.

In the latest quarter ended in March, Brookfield Infrastructure’s funds from operations rose 10% YoY to US$709 million, while funds from operations per unit increased to US$0.90 from US$0.82. This growth came from inflation-linked revenue, strong midstream utilization, newly commissioned projects, and recent acquisitions.

The company’s data segment was especially strong, with funds from operations rising 46% YoY. Similarly, its midstream funds from operations climbed 12% from a year ago, while utilities posted 5% growth.

With predictable cash flows, global diversification, and a growing data infrastructure business, Brookfield Infrastructure looks like a dependable long-term holding for building TFSA passive income.

COMPANYRECENT PRICENUMBER OF SHARESINVESTMENTYEARLY DIVIDEND PER SHARETOTAL PAYOUT
Peyto Exploration & Development$25.52275$7,018$1.44$396
Brookfield Infrastructure Partners$56.66123$6,969$2.56 (or US$1.82)$315
TOTAL$13,987$711
Prices as of July 22, 2026

Generating reliable passive income inside a TFSA

If you split a $14,000 TFSA equally, you would invest roughly $7,000 in each stock. At Peyto’s current 5.8% annualized dividend yield, that investment could generate about $396 a year. Meanwhile, about $7,000 invested in Brookfield Infrastructure at its current 4.5% annualized distribution yield could add roughly $315 annually.

Together, that works out to about $711 in annual passive income, all while giving you exposure to two businesses with room to grow over time. If both companies continue raising their payouts, and you reinvest those distributions instead of spending them, your passive income could become even larger in the years ahead.

Fool contributor Jitendra Parashar has no position in any of the stocks mentioned. The Motley Fool recommends Brookfield Infrastructure Partners. The Motley Fool has a disclosure policy.

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