4 TSX Stocks to Buy With $20,000 for Passive Income

Here are four TSX-listed dividend stocks that could strengthen your passive-income portfolio.

Key Points
  • Enbridge, Bank of Nova Scotia, Fortis, and Canadian Natural Resources are strong candidates for a passive-income portfolio, offering reliable dividend payouts and growth potential in uncertain markets.
  • Enbridge and Fortis lever substantial infrastructure investments, while Scotiabank and CNQ capitalize on strategic positional shifts and resource depth to ensure long-term income and resilience against inflation.

In an uncertain macroeconomic environment, passive income can provide greater financial resilience and help investors preserve purchasing power amid persistent inflation. Among the various avenues for generating passive income, investing in high-quality dividend stocks stands out as an effective strategy, offering investors the potential to benefit from both recurring dividend income and long-term capital appreciation. Against this backdrop, let’s examine four TSX-listed dividend stocks that could strengthen your passive-income portfolio.

earn passive income by investing in dividend paying stocks

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Enbridge

Enbridge (TSX: ENB) is an attractive option for income-seeking investors, thanks to its highly contracted business model, resilient cash flows, and long-standing record of dividend growth. The company operates more than 200 income-generating energy assets, with approximately 98% of its earnings derived from long-term take-or-pay contracts and regulated assets. A significant portion of its earnings is also supported by inflation-linked mechanisms, providing additional protection against rising costs.

This predictable business model has enabled Enbridge to generate stable cash flows and reward shareholders with dividends for more than seven decades. The company has also increased its dividend for 26 consecutive years and currently offers a forward yield of approximately 5.87%.

Looking ahead, growing oil and natural gas production in North America should support demand for Enbridge’s extensive energy infrastructure. The company has identified approximately $50 billion in growth opportunities and plans to invest $10–$11 billion annually to advance these projects. These investments could expand its earnings and cash-flow base while supporting continued dividend growth, making Enbridge a compelling candidate for investors seeking sustainable passive income.

Bank of Nova Scotia

Another dividend stock that could appeal to income-seeking investors is Bank of Nova Scotia (TSX: BNS), which provides financial services across multiple markets. Its diversified operations have supported relatively consistent earnings and cash flows, enabling the bank to maintain an uninterrupted dividend record since 1833. Scotiabank has also increased its dividend at an annualized rate of 4.5% over the past decade and currently offers a forward yield of 3.46%.

The bank is sharpening its focus on its more profitable North American operations while scaling back its exposure to Latin American markets. This strategic repositioning could enhance the quality and stability of its earnings over time. Meanwhile, higher interest rates for a longer period amid persistent inflation could support net interest margins and lending income. However, the impact will depend on the broader economic and credit environment.

With its long dividend history, diversified operations, and ongoing strategic repositioning, Scotiabank offers investors a compelling combination of income and potential long-term growth.

Fortis

Third on my list is Fortis (TSX: FTS), a regulated utility that has increased its dividend for 52 consecutive years. Serving approximately 3.5 million customers across Canada, the United States, and the Caribbean, Fortis benefits from the essential nature of its operations and a predominantly regulated asset base. This structure provides greater earnings visibility and helps shield its financial performance from economic and market volatility, supporting consistent cash flows and a reliable dividend-growth track record. With a quarterly payout of $0.64 per share, the stock currently offers a forward yield of 3.41%.

Fortis is investing heavily to expand its asset base through a five-year, $28.8 billion capital plan. These investments could drive its rate base at an annualized rate of approximately 7%, reaching $57.9 billion by the end of this decade. Combined with ongoing efficiency initiatives, this expansion should support sustainable earnings and cash-flow growth. Management expects to increase the dividend at an annualized rate of 4–6% in the coming years, reinforcing Fortis’s appeal to investors seeking dependable income and long-term dividend growth.

Canadian Natural Resources

My final pick is Canadian Natural Resources (TSX: CNQ), which has increased its dividend for 26 consecutive years at an annualized rate of more than 20%. The company operates a portfolio of large, high-quality, long-life oil and natural gas assets. Its efficient operations and relatively modest capital reinvestment requirements help keep costs low and breakeven levels competitive, enabling robust profitability and cash flow across commodity-price cycles. This resilient business model has supported sustained dividend growth, with its quarterly payout of $0.615 per share currently translating into a forward yield of 3.71%.

Meanwhile, elevated geopolitical tensions in the Middle East have contributed to higher oil and natural gas prices, potentially benefiting energy producers such as CNQ. The company is also investing approximately $7.6 billion this year to strengthen its production capabilities. In addition, its roughly five billion barrels of oil equivalent in reserves and an estimated reserve life of 30 years provide a strong foundation for long-term production and cash-flow growth.

Fool contributor Rajiv Nanjapla has no position in any of the stocks mentioned. The Motley Fool recommends Bank Of Nova Scotia, Canadian Natural Resources, Enbridge, and Fortis. The Motley Fool has a disclosure policy.

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