There are multiple reasons for having $15,000 in your Tax-Free Savings Account (TFSA). You may have past TFSA contributions carried forward, creating sufficient room to invest $15,000. Or you might have just sold a growth stock that has earned you good profits, which you are looking to rebalance into passive income.
Just how a $15,000 TFSA balance need not come from your working income, monthly payouts need not come from monthly dividend stocks.
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How to use TFSA to bring in $49 a month starting with only $15,000
If not monthly stocks, then what? Three quarterly dividend stocks with different payout dates can help you get a payout every month. You may wonder why take the effort. Monthly dividend stocks do not offer the attractive dividend growth rates that quarterly dividend stocks do.
Building a dividend ladder with quarterly stocks
Enbridge (TSX: ENB) pays dividends on the first of March, June, September, and December. It slowed its dividend growth in the pandemic from 10% to 3%. However, the pipeline operator is expected to grow dividends by 5% annually from 2027 onwards. This dividend growth will be supported by the massive gas pipeline projects coming online in the next three years. Now is a good time to buy Enbridge stock as new projects could drive up its share price.
| ENB | Cenovus Energy | POW | Emera |
| 1-Mar | 31-Mar | 27-Apr | 15-May |
| 1-Jun | 30-Jun | 26-Jul | 17-Aug |
| 1-Sep | 29-Sep | 26-Oct | 14-Nov |
| 1-Dec | 31-Dec | 26-Jan | 13-Feb |
The next leg in the dividend ladder
Complementing Enbridge’s dividend is Power Corporation of Canada (TSX: POW) with a dividend yield of 2.88% and a dividend growth rate of 10%. Power Corporation’s dividend dates are 26th of April, July, October, and January. This creates a two-month gap from Enbridge’s dividend dates. Cenovus Energy (TSX: CVE) has dividend dates closer to March 31, but the yield is only 2.16%. A $5,000 investment can get you the April payout of $25.96 if you invest in Cenovus and $35.38 if you invest in Power Corporation. A one-month delay can create a difference of $10.
| Stock | Purchase price | Investment Amount | Number of shares purchased | Dividend per share | Annual Dividend Amount | Monthly Dividends |
| ENB | $77.25 | $5,000 | 65 | $3.88 | $252.20 | $63.05 |
| POW | $93.56 | $5,000 | 53 | $2.67 | $141.51 | $35.38 |
| EMA | $75.55 | $5,000 | 66 | $2.93 | $193.38 | $48.35 |
| $15,000 | Total | $587.09 | $48.92 | |||
| CVE | $42.48 | $5,000 | 118 | $0.88 | $103.84 | $25.96 |
Beyond dividend amounts and dates, let’s compare the two stocks on safer dividends. Financial holding company Power Corporation provides a safer dividend option as it gets its dividends from its two operating companies, Great-West Lifeco and IGM Financial. Insurance premiums and mutual fund investments help them earn strong cash flows. Moreover, Power Corporation has a 22-year history of paying dividends. Cenovus started paying dividends in 2021 when the oil sector began its upcycle. Its dividends are yet to test the downcycle.
If safety is your requirement, Power Corporation is better for the long term.
The final ladder in the TFSA monthly dividend
Emera (TSX: EMA) is an energy holding company with dividend dates completing the missing pieces of the monthly grid. With a 3.87% dividend yield and a 3-4% dividend-growth rate. It has gas power and gas utilities in the United States and Canada and earns dividends from the utility bills. The company slowed its dividend growth in the last two years but could likely resume growth.
If you opt for Power Corporation, you can get a monthly payout in the $35 to $63 range, with an average monthly payout of $49.
