I Split $21,000 Across 3 TSX Stocks for $1,070 a Year

These three dividend stocks can help you build a diversified portfolio that generates income.

Key Points
  • Enbridge (TSX:ENB): A $7,000 investment yields 5.4%, earning $376.36 annually from its stable infrastructure and diversified energy assets.
  • Choice Properties REIT (TSX:CHP.UN): Invest $7,000 for a 5% yield, generating $350.22 annually from its stable necessity-based retail portfolio.
  • Surge Energy (TSX:SGY): A $7,000 investment in this smaller energy producer yields 5%, providing $346.26 annually from its quality asset base and solid cash flow.

You can find a great array of dividend stocks on the TSX. Real estate, infrastructure, utilities, industrials, and banks are all great hunting grounds for dividends. You have no shortage of opportunities to build a diversified portfolio that generates income.

If you had $21,000, here is how you could split it across three dividend stocks over $1,000 a year.

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A top TSX infrastructure stock

The first TSX stock to buy is Enbridge (TSX: ENB). This is one of the largest stocks on the TSX with a market cap over $156 billion. With this stock, investors get to own a stake in crucial North American oil pipelines, natural gas transmission and distribution utilities, export and storage terminals, and renewable power plants.

With 98% of its income contracted or regulated, it is a very stable company. Its mix of high-quality counterparties helps support that stability.

Enbridge is not the fastest-growing stock on the TSX. However, it has $50 billion of growth development opportunities over the coming five years. That should translate into 5% earnings per share growth and 5% annual dividend growth.

Enbridge yields 5.4% today. It has a 31-year record of consecutively increasing its dividend. A $7,000 investment in Enbridge would earn $94.09 quarterly or $376.36 annually.

A top REIT

The second TSX stock I’d buy is Choice Properties Real Estate Investment Trust (TSX: CHP.UN). While not at the scale of Enbridge, it is the largest real estate investment trust (REIT) in Canada. Like Enbridge, it has a very stable, steady business model.

The largest part of its portfolio is necessity-based retail properties. Its biggest tenant is Loblaw, which happens to be Canada’s largest grocer and pharmacy.

The REIT is about to be substantially larger once it fully acquires the high-quality retail assets of First Capital REIT. Like Enbridge, Choice is only growing by a low single-digit rate. However, it has a really solid portfolio with high occupancy. Its income is economically solid.

Choice stock yields 5%. A $7,000 investment would have earned $29.19 monthly or $350.22 annually.

A TSX energy stock with an attractive dividend

Surge Energy (TSX: SGY) is the last TSX stock I would buy Unlike the two stocks above, Surge is not a leading energy company. It only has a market cap of $1 billion.

With 24,000 barrels of oil equivalent under production, Surge is one of the smaller producers on the TSX. However, the company has done a great job of building a mix of quality assets and maintaining a solid balance sheet.

Surge is generating a tonne of cash flow. It trades with a 15% free cash flow yield. Despite its 5% dividend yield, it still has a very modest payout ratio. A $7,000 investment in Surge Energy would earn $28.85 monthly or $346.26 annualized.

The Foolish bottom line

Add up the annual dividend from these three diverse stocks and you would earn $1,072 every year. By diversifying, you get to hedge your economic exposure.

Likewise, you ensure that your income stream remains resilient through the various market cycles. Each of these stocks are interesting bets if you are looking for an elevated yield in the 5% range.

COMPANYRECENT PRICENUMBER OF SHARESDIVIDENDTOTAL PAYOUTFREQUENCY
Enbridge$71.4797$0.97$94.09Quarterly
Choice Properties REIT$15.59449$0.065$29.19Monthly
Surge Energy$10.42671$0.043$28.85Monthly

Fool contributor Robin Brown has no position in any of the stocks mentioned. The Motley Fool recommends Enbridge and First Capital Real Estate Investment Trust. The Motley Fool has a disclosure policy.

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