Monthly dividend stocks have a simple charm: they make your portfolio feel like it is actually showing up for work. Instead of waiting for a quarterly payout, investors get a steadier stream of cash that can be reinvested faster or used to help cover regular expenses. That rhythm can make a stock easier to hold through market noise, and when the business behind the payout looks stable, the whole setup gets even more appealing.

BPF

Boston Pizza Royalties Income Fund (TSX:BPF.UN) is not a restaurant operator in the usual sense. It collects royalty income tied to the sales of Boston Pizza restaurants in its royalty pool. That means investors are really buying into the revenue power of the brand rather than worrying about running kitchens themselves. It is a pretty clean model, and it gives the fund exposure to restaurant spending without all the usual operating headaches.

Over the last year, the story has actually been stronger than some investors might expect. The fund reported record franchise sales of $976.3 million for 2025, up from $931.7 million in 2024. That growth came largely from positive same-restaurant sales, which is exactly what income investors want to see. Better sales through the system usually mean a sturdier base for monthly distributions.

There was also a small but useful stability signal in January 2026, when Boston Pizza International announced there were no changes to the royalty pool because no restaurants were added or permanently closed during 2025. That is not exciting in a headline-grabbing way, but it does suggest the restaurant base stayed steady. For a monthly dividend stock, boring can be beautiful.

Into earnings

The earnings side looks solid. In 2025, the fund generated record franchise sales and continued supporting its monthly distribution policy. Trailing earnings per unit were at $1.98 and a trailing price-to-earnings ratio of 12.1, which is not demanding for a branded consumer royalty fund paying investors every month. That valuation does not scream “deep bargain,” but it also does not look overheated.

The distribution itself still looks attractive. The fund has kept the payout of $1.44 annually, with a payout ratio around 71.2%. That is a much more comfortable number than the kind of stretched payout ratios that often make high-yield stocks look scary. In other words, this does not look like a reckless payout story. It looks more like a brand-based income vehicle with a decent cushion.

Valuation and future outlook are where the case comes together. The units recently traded with a 6% yield. The future will depend on consumer spending and whether franchise sales can keep rising, because restaurant brands are never totally immune to slower spending. But Boston Pizza has a familiar name, steady royalty income, and a long record of distributions. That makes it a pretty sensible fit for investors who want cash flow without needing a moonshot. Even with $7,000 to invest.

Bottom line

Put it all together and Boston Pizza Royalties Income Fund still looks like a compelling monthly dividend stock play. It has a straightforward royalty model, record system sales, a manageable payout ratio, and cash that lands every single month. For investors who want reliable monthly income with a recognizable Canadian brand behind it, this one still deserves a seat at the table.

The post The 6% Dividend Stock That Pays Every. Single. Month. appeared first on The Motley Fool Canada.

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

2026

I see a lot of investors, especially younger ones just getting started, going all in on a 100% equity portfolio. They own stocks across different countries and all 11 sectors and assume that means they are fully diversified. In a sense, they are, but only within one asset class.

True diversification goes beyond that. There is real value in holding assets that behave differently from stocks. When equities fall, other assets may hold up better.

That gives you the ability to rebalance, buying stocks when they are down and trimming what has held up. Over time, that process can improve returns and reduce risk. Diversification is often called the only free lunch in investing for a reason.

The question then becomes what to pair with stocks. Some investors turn to gold or even Bitcoin. Those have their place, but there is also a strong case for going back to basics and looking at bonds again, with a bit more selectivity.

In particular, government bonds issued by the Canadian federal and provincial governments are starting to look worth a second look.

Why government bonds?

Bonds serve a few important roles in a portfolio. They provide a steady stream of income, tend to be less volatile than stocks, and often hold up better during equity market downturns. That makes them useful as a stabilizer.

That said, not all bonds are the same. Broadly speaking, you can split the market into government bonds and corporate bonds.

Corporate bonds are essentially loans to companies. Because companies can run into financial trouble, these bonds carry credit risk. Most are rated investment grade, typically ranging from BBB to A, with a smaller number reaching AA or AAA. As you move down the credit spectrum, yields increase, but so does the risk that the issuer may not be able to meet its obligations.

Government bonds are different. Bonds issued by the Canadian federal and provincial governments are generally rated very highly, often AA or AAA. That makes them far less likely to default. You do give up some yield compared to corporate bonds, but you gain stability.

If the goal is to have something in your portfolio that can help cushion the blow during a market downturn, government bonds have historically done a better job of that than their corporate counterparts.

How to invest in government bonds

For most investors, especially those just starting out, buying individual bonds is not practical. Pricing is not always transparent, and you need to understand concepts like yield to maturity, duration, and how interest rate changes affect prices. It is easy to get it wrong.

A much simpler approach is to use somehting like the iShares Core Canadian Government Bond Index ETF (TSX: XGB). It tracks the FTSE Canada All Government Bond Index and provides exposure to a broad basket of government bonds.

The fund holds about 557 bonds, with roughly 57% in federal government bonds and about 40% in provincial bonds. From a credit perspective, the portfolio is high quality. Around 59% is rated AAA and about 36% is rated AA, which keeps default risk very low.

On the income side, the ETF currently offers a 3.1% trailing 12-month yield after fees. The management expense ratio is just 0.13%, which is reasonable for this type of exposure.

In terms of how to use it, it can act as a stabilizer in a portfolio that is otherwise heavily weighted toward stocks. If you are currently 100% in equities, you might consider shifting to something like 90% stocks and 10% government bonds.

There are also simple rules of thumb. One common guideline is to subtract your age from 100 to determine your stock allocation, with the remainder in bonds. So if you are 50 years old, that would suggest a 50/50 split between stocks and bonds.

The post Why Government Bonds Are Starting to Look Worth a Second Look appeared first on The Motley Fool Canada.

Fool contributor Tony Dong has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

2026

It’s the million-dollar question that many prospective retirees are wondering: how much do you really need to have before you can finally leave the labour force without worry? Is the answer to that million-dollar question a million dollars? Or could rising inflation raise the bar on that figure? Of course, there’s really no single answer that’s going to please everybody.

Sure, $1 million might be good enough for some to sustain a retirement, but for a big spender with a fancy lifestyle and a taste for the finer things in life, perhaps more is needed before one can confidently mark a retirement date on their calendars. It’s a very personal question that depends on quite a few variables.

Most notably, how much risk are you willing to take on once you’re actually retired? Are you still willing to own stocks (preferably dividend payers) and the odd growth play? Or are you shifting gears towards a bond-heavy portfolio? Does the 60/40 mix still interest you? Or are you planning to double down on cash, guaranteed investment certificates (GICs), and money market funds?

So, how much do you need in a TFSA to retire? Short answer: It depends.

Indeed, it’s nice to have safety and guarantees once you’ve finally retired. But depending on your goals, risk tolerance, lifestyle situation, and monthly cash flow statement, you’re probably not going to share the magic retirement figure with others. For some, it might be more about retiring earlier, even if it means not being able to have more than enough discretionary income to splurge without thinking about things too much.

If you’re fine with budgeting and you’re okay with a withdrawal rule (let’s say drawing down 4% of your portfolio per year or 1% every quarter) instead of focusing on dividend and interest payments, perhaps you might need less than you expect. Of course, drawing down could leave you in a tougher spot if you’re doing so in a bear market. In such a climate, you should be adding to stocks, rather than continuing to draw down. Either way, there really is no single figure that’s needed in your retirement or your TFSA.

If you’ve been making consistent contributions to your TFSA, you’ll be able to get a jolt from the power of tax-free compounding and dividends. And while there’s no single TFSA milestone you should target until you gain a better understanding of how much you’ll actually need (let’s not forget about other sources of income like pensions, CPP, OAS, and all the sort if you’re planning to retire at a more traditional age), I do think that investing with your TFSA in quality dividend stocks is the way to go.

Indeed, your TFSA could play a pivotal role in retirement as it generates income without taxes thrown in. That’s powerful.

The best income bet for a TFSA?

In terms of ideal ETFs, I like the Vanguard FTSE Canadian High Dividend Yield Index ETF (TSX:VDY), which I find to be better than the broader TSX Index. As it turns out, focusing on the largest dividend payers in the Canadian stock market hasn’t just been key to a fatter dividend payout; it’s also been a strategy that’s topped the TSX Index over time.

When you focus on the cash cows that are best positioned to raise their dividends, I do think there’s a lot of total return to be had as well. And, of course, a lower beta relative to the S&P 500. Either way, I like the big dividend payers (financials and energy specifically) and view most other smaller sectors of the Canadian market as better pursued via stock picking rather than going for a broader TSX ETF.

So, in short, the retirement amount in a TFSA and elsewhere is deeply personal, and it’s going to be different for everyone. For some, it’s $1 million, for others, it might be more or less, depending on the cash coming in and the cash flowing out. Either way, invest for the long-term and have a game plan for your TFSA.

The post Canadians: Here’s How Much You’ll Likely Need in Your TFSA to Retire appeared first on The Motley Fool Canada.

Fool contributor Joey Frenette has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

2026

Passive income planning can get messy fast in a non-registered account. It is not as simple as taking a fund’s stated yield, multiplying it by your portfolio value, and calling it a day. That yield can change, and more importantly, taxes complicate everything.

Different types of income are taxed differently. Eligible dividends, non-eligible dividends, capital gains, foreign income, and return of capital all have their own rules. Once you factor that in, your “expected income” number can look very different after tax.

Inside a Tax-Free Savings Account (TFSA), all of that becomes irrelevant. That simplicity makes it much easier to plan around a target income number. And if you are not strictly using your TFSA for long-term compounding, it can be a tool for generating passive income.

That said, fund selection still matters. The goal should be to keep fees low and maintain diversification. Strategies that rely on leverage or covered calls can boost yield, but they often come with higher costs, more risk, and weaker long-term returns.

With that in mind, here is one possible way to structure a TFSA to generate about $4,360 per year in tax-free income using exchange-traded funds (ETFs).

The ETF to use

The BMO Growth ETF (TSX: ZGRO) is an unorthodox starting point for a TFSA passive income investor.

It is an asset allocation ETF, meaning it holds a mix of underlying ETFs rather than individual stocks or bonds. The portfolio is roughly 80% global equities across Canada, the U.S., and international markets, and 20% global bonds.

That mix gives you growth potential along with some stability and income from the bond portion. The cost is also reasonable at a 0.18% expense ratio. The downside is yield.

On its own, ZGRO only yields about 1.4%, which is not particularly helpful if your goal is income. You could generate cash flow by selling units, but many investors are uncomfortable with that because it feels like drawing down principal.

That is where the target cash flow version comes in. ZGRO.T holds the exact same underlying portfolio as ZGRO, but it is structured to pay out a higher, more consistent monthly distribution.

BMO does this by combining the underlying dividends with realized capital gains and return of capital. The goal is to deliver a higher, more predictable cash flow, currently around a 5.4% yield.

How much do you need to invest?

Let’s break this down step by step. Your target is $4,360 per year in passive income.

First, convert that into a monthly number: $4,360 ÷ 12 = about $363.33 per month

ZGRO.T paid $0.058 per unit in March, and it was the same in January and February, so we will assume that level holds.

Now divide your monthly income target by the per-unit distribution: $363.33 ÷ $0.058 ≈ 6,264 units

Now multiply that by the current unit price: 6,264 × $12.98 ≈ $81,300

That means you would need roughly $81,300 invested to generate about $4,360 per year, or $363 per month, in tax-free income.

Just remember that ZGRO.T’s distribution payout is designed to be stable, but it is not guaranteed, and the underlying portfolio value will still fluctuate with the market.

The post How a TFSA Could Help You Earn $4,360 in Tax-Free Passive Income Each Year appeared first on The Motley Fool Canada.

Fool contributor Tony Dong has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

2026

If you want to earn regular tax-free income, the Tax-Free Savings Account (TFSA) is one of the best places to invest. The TFSA is the most flexible registered account. You don’t pay any tax on your income earned or your withdrawals.

The TFSA is the ideal place to earn tax-free income

Now, it is a wise practice to monitor your withdrawals because you can’t recontribute that TFSA space until the following year. However, the withdrawals are penalty free. If you want to withdraw monthly income from the account, you can.

If you do want monthly income in your TFSA, you will have to limit your investment scope a bit. There are only a handful of Canadian stocks that still pay monthly dividends. Many of these stocks are limited to real estate, energy, royalty, and industrials. To broaden your investment scope, it is wise to accept quarterly dividends as well.

If you have $40,000 to invest in your TFSA, here is a four-stock mini-portfolio that could collectively earn you an average of $133.70 per month of extra income.

Pembina Pipeline

The first stock I would buy today with $10,000 of TFSA cash is Pembina Pipeline (TSX:PPL). It yields 4.6%. Your investment would earn $114.31 quarterly or $38.10 averaged monthly.

Pembina provides end-to-end infrastructure for Western Canadian energy producers. This comes with some enviable assets including a Canada-U.S. egress pipeline, collection pipelines, a collection of midstream facilities, a propane export terminal, and an LNG terminal in development.

It earns a solid, steady base of cash flows that widely support its dividend. Pembina has a target to grow its contracted earnings base by 5–7% per year to 2030. It is a safe, growing opportunity to earn income in your TFSA.

First Capital REIT

Another TFSA dividend stock to buy with $10,000 is First Capital Real Estate Investment Trust (TSX:FCR.UN). This stock is a true monthly dividend stock. It yields 4.4%. This TFSA investment would earn $35.72 every month.

It has a high-quality portfolio focused on urban, grocery-anchored retail properties. This REIT has high 97% occupancy, strong rental rate growth, and very defensive assets. With an improving balance sheet, investors should enjoy dividend growth in the coming years as well.

Granite REIT

Another REIT to buy with $10,000 is Granite Real Estate Investment Trust (TSX:GRT.UN). It yields 4% today. This TFSA stock would earn you $33.72 every month.

Granite has a really strong mix of industrial, logistics, and manufacturing assets. These are positioned in crucial logistic/manufacturing hubs around North America and Europe.

It has 98% occupancy, high single-digit rent growth, and a mix of quality, long-term tenants. GRT.UN has grown its distribution annually for 15 consecutive years!

Fortis: A safe long-term TFSA hold

Fortis (TSX:FTS) is a final TFSA stock to buy with $10,000. It yields 3.2%. Your TFSA investment would earn $78.74 quarterly or $26.25 monthly.

Fortis is one of the most stable stocks you can find in Canada. It operates nine regulated utilities with crucial transmission and distribution assets across North America. The company earns a predictable income stream that has afforded it 52 years of consecutive dividend increases.

FTS stock continues to target 7% compounded annual growth over the coming five years. That means its dividend should keep on growing, making it a perfect income stock to tuck away long term in your TFSA.

Prices as of April 9, 2026

The post How to Build a 2026 TFSA Strategy That Generates Monthly Cash appeared first on The Motley Fool Canada.

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

2026

Building a reliable stream of passive income isn’t just about finding high yields — it’s about owning companies that can grow their payouts year after year. In Canada, a handful of proven businesses have demonstrated the ability to increase dividends through economic cycles, rewarding patient investors with rising income and long-term capital appreciation. The following three dividend stocks offer a decent blended yield as well as consistently grow their payouts over time.

Canadian Natural Resources: Income backed by strong cash flow

Canadian Natural Resources (TSX:CNQ) remains one of the most dependable dividend growers in the energy sector. Despite the inherent volatility of commodity prices, the company has increased its dividend for roughly 25 consecutive years. Even more impressive, its dividend has grown at an annualized rate of about 18% over the past decade.

This consistency is driven by its portfolio of long-life, low-decline assets, which provide stable production and predictable cash flow. These characteristics allow the company to generate significant free cash flow even during weaker oil price environments. Management has also demonstrated discipline in capital allocation, using a mix of organic growth, acquisitions, and technological improvements to enhance efficiency.

For investors, this translates into a dividend that is both resilient and positioned for continued growth. While energy stocks can be cyclical, and it would be safer to buy shares on market pullbacks, analysts currently believe  Canadian Natural Resources is fairly valued at about $63 per share with a yield of nearly 4%. Long-term investors should continue to enjoy a growing dividend from the energy stock.

Power Corporation: Diversified growth with steady dividend increases

Power Corporation (TSX:POW) offers a nice mix of stability and growth through its diversified financial services holdings. Currently yielding around 3.8%, the company has increased its dividend consistently for over a decade, with a 10-year growth rate near 7%.

What makes Power Corp. particularly attractive is its multiple growth engines. Its controlling stake in Great-West Life provides exposure to insurance, retirement, and wealth management — with meaningful exposure (about 29% of adjusted earnings) to the growing U.S. market. In addition, the company continues to expand its alternative asset platforms, including private equity, credit, and infrastructure investments.

Another key driver is its investment in Wealthsimple, a rapidly growing fintech platform that appeals to younger investors through digital trading and robo-advisory services. These initiatives position Power Corp. to benefit from both traditional and emerging financial trends.

Although management targets dividend growth of 5–7% annually, recent increases have exceeded that range, suggesting potential higher growth. For income investors, Power Corp. delivers a balanced mix of current yield and sustainable dividend growth.

Brookfield: Lower yield, higher long-term income potential

Brookfield (TSX:BN) may not offer the highest starting yield, but it compensates with strong long-term growth potential. The company has increased its dividend for over a decade, achieving a 10-year growth rate of approximately 10%.

With roots stretching back more than a century, Brookfield has evolved into a global investment powerhouse managing over US$1 trillion in assets. Its ability to invest across multiple sectors and geographies — particularly in areas where capital is scarce — gives it a unique competitive advantage.

Brookfield also invests significant capital (about US$180 billion) alongside its clients, aligning its interests with long-term value creation. This disciplined approach has resulted in exceptional performance, with annualized returns of about 19% between 1993 to 2025.

For investors willing to accept a lower initial yield, Brookfield offers the potential for steadily rising dividends and meaningful capital appreciation over time.

Investor takeaway

These three Canadian dividend stocks demonstrate that growing passive income is achievable with the right investments. Canadian Natural Resources offers high growth potential in the energy sector, Power Corporation provides diversified and steady expansion, and Brookfield delivers long-term compounding potential. Together, they highlight a powerful strategy: focus not just on yield, but on companies capable of increasing dividends consistently for years to come.

The post 3 Canadian Dividend Stocks Whose Passive Income Continues to Grow Over Time appeared first on The Motley Fool Canada.

Fool contributor Kay Ng has positions in Brookfield. The Motley Fool has positions in and recommends Brookfield. The Motley Fool recommends Brookfield Corporation and Canadian Natural Resources. The Motley Fool has a disclosure policy.

2026

TFSAs are great investment vehicles that can provide decades of compounding, provided the right stocks are picked. That’s because the TFSA allows every invested dollar and dividend earned to grow tax-free. For most investors, a TFSA strategy grounded in three top dividend stocks can provide the growth needed to generate meaningful income.

There’s no shortage of great investments to help fund that TFSA strategy. Here’s a look at three top picks that offer good yields, diversified business segments and long-term growth potential.

TD can anchor a long‑term TFSA portfolio

Toronto‑Dominion Bank (TSX:TD) is the first of three stocks to use for any TFSA strategy. As one of Canada’s big bank stocks, TD offers stable revenue generation from one of the most reliable financial institutions in North America.

TD benefits from a diversified earnings base that includes retail banking, wealth management, and U.S. operations segments.

TD’s international presence in particular warrants mention. The U.S. branch network spans from Maine to Florida. That cross‑border exposure gives investors access to two major economies through a single stock.

TD also has a long history of paying its dividend for well over a century. The bank has also provided annual upticks to its payment for over a decade. As of the time of writing, TD offers a yield of 3.1%.

For TFSA investors looking for a dependable income‑producing stock with long‑term staying power, TD offers a compelling foundation.

Fortis adds defensive strength and reliability

The second stock to add to any TFSA strategy is Fortis (TSX:FTS). Fortis is one of Canada’s largest utility stocks. Utilities are dependable income producers, and Fortis’s role in a TFSA is simple.

As a regulated utility operating across Canada, the U.S., and the Caribbean, Fortis generates predictable earnings from essential services like electricity and natural gas distribution. These regulated operations provide steady cash flow regardless of market conditions.

This makes Fortis a classic defensive holding for any portfolio.

What sets Fortis apart is its remarkable dividend track record. Fortis has paid dividends and provided annual increases for 53 consecutive years without fail. This makes it one of the most reliable dividend growers in North America, and one of only two Dividend Kings in Canada.

As of the time of writing, Fortis offers a yield of 3.2%.

For TFSA investors, Fortis is the defensive anchor that offers growth and reliability. It’s the stock that will keep compounding for decades.

Canadian Natural Resources can provide long‑term growth

The third pick for investors seeking a TFSA strategy to consider is Canadian Natural Resources (TSX:CNQ). Canadian Natural offers investors a different kind of strength.

The company is one of the largest and most efficient energy producers in Canada. Canadian Natural generates substantial free cash flow, especially during periods of strong commodity prices. The company has used that cash flow to reward shareholders through a combination of dividend increases and aggressive share buybacks.

Part of the reason for that is energy producer’s long‑life, low‑decline asset base. This gives the it a durable production profile that can generate cash even during weaker pricing environments.

That stability allows Canadian Natural to pay out a reliable and recurring dividend. As of the time of writing, Canadian Natural offers a yield of 4%. The company has also provided annual increases to that dividend for over a decade.

For investors seeking a TFSA strategy built on income and growth, Canadian Natural adds an element of upside that complements the stability of TD and Fortis.

Build your long‑term TFSA strategy

Together, the three stocks mentioned above provide a balanced TFSA portfolio that caters to growth, income and stability.

While no stock is without risk, each of the stocks mentioned above offers defensive appeal to support long-term income growth.

In my opinion, one or all of the above should be core holdings in any well-diversified TFSA portfolio.

The post Here’s the 3-Stock TFSA Strategy I’d Use in 2026 appeared first on The Motley Fool Canada.

Fool contributor Demetris Afxentiou has positions in Fortis and Toronto-Dominion Bank. The Motley Fool recommends Canadian Natural Resources and Fortis. The Motley Fool has a disclosure policy.

2026

It is possible to get your growth and stability (think a beta lower than 1.0, which entails less correlation to the TSX Index) in the same portfolio. Undoubtedly, you’ve probably heard of the so-called “barbell portfolio,” which aims to find the right balance between the high-growth names with higher betas (that means higher volatility) and the steady Eddie plays. On one side of the barbell, you might have some of the fast-rising AI growth plays that are more than worth adding after the latest slump in mega-cap tech stocks.

And, on the other side, perhaps there’s room for gold (maybe even silver for added torque), bond funds, guaranteed investment certificates (GICs), defensive dividend stocks, real estate investment trusts (REITs), money market funds, and, of course, higher-yielding index funds, and low-volatility and specialty income ETFs. Now, that’s a lot to consider on the risk-off part of the barbell portfolio.

And while I am a bigger fan of money market funds than GICs, given the flexibility to move funds out of the funds and into stocks should the broad markets suddenly crash unexpectedly, I do think that every investor should understand the magnitude of risks they’d be willing to take in the risk-off side of the portfolio. If you’re going to take on more risk for more growth with the risk-on side, your risk-off side should live up to the promise!

Gold looks riskier, but is it a buy?

Of late, gold might be riskier than many would give it credit for. Depending on the strength of your stomach, it might be more of a risk-on asset after the plunge it put investors through at the start of the year. Given retail investor interest in gold and other metals, I’d argue that gold is a dynamic asset that could be considered both a risk-on and risk-off asset at the same time, depending on the environment.

For now, I’d be more inclined to stash it in the risk-on part of the barbell, especially if you need the risk-off side to be solid in times of turmoil. The Sprott Physical Gold Trust (TSX:PHYS) is my favourite way to bet on gold at a nice discount. It’s a closed-ended fund and one that’s currently going for a 2.2% discount to net asset value (NAV).

What’s most enticing about PHYS is that it’s exposed to the actual physical metal. With a 0.40% management expense ratio (MER), the CEF is also competitively priced for investors ready to add to their gold exposure on the risk-on side of the portfolio.

I think gold’s risk-on feel is a reason why many have shied away from the asset. As the debasement trade and central bank buying continue, though, my bet is that gold might outpace the stock market from here.

What about the risk-off portion?

Arguably, long-duration bonds are choppier and riskier, given the risk of losses if rates were to march higher again. Given the duration and rate risk, I’d argue that many may underestimate the risks associated with bonds, especially given the limited upside potential if rates do move lower compared to the runway if rates move higher. For safe investors, shorter-duration bonds might be a better bet.

And money market funds that invest in commercial paper and Treasury Bills (T-Bills) might be the ultimate risk-off asset for those who are willing to settle for slightly less yield. Personally, I think money market funds are in a sweet spot between GICs and savings and shorter-duration bonds. The risk is low, and the yield is decent enough to keep up with inflation while ensuring one’s liquidity isn’t locked up for years.

The TD Cash Management ETF (TSX:TCSH) is a great ETF to buy to score a 2.8% yield or so (Bank of Canada decisions will move the needle on that yield) while ensuring minimal (even microscopic) risk. The price of TCSH tends to reset back to or within a few pennies of $50.00 every month. With a better yield than savings accounts, more wiggle room versus GICs, and far less risk than bond funds, the TCSH and its like are fantastic options for investors who need a parking space for cash in the risk-off side of the portfolio.

The post The Stocks I’d Pair Together to Get Both Growth and Stability in One Portfolio appeared first on The Motley Fool Canada.

Fool contributor Joey Frenette has positions in Sprott Physical Gold Trust and the TD Cash Management ETF. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

2026

Saving money is a vital first step toward financial security, but the real magic happens when you transform those savings into a productive investment portfolio. For many Canadian investors, the ultimate goal is to make a reliable, consistent stream of passive income that can supplement a lifestyle or fund a long-term retirement.

With $50,000 in capital, you have several opportunities to turn that dry powder into a significant annual dividend stream yielding nearly 6% per annum. Pipelines giant South Bow (TSX:SOBO) stock is one of the premier candidates to do the heavy lifting in a modern dividend portfolio.

A passive income investment case for South Bow stock

Investors seeking substantial and reliable passive income should take a close look at South Bow stock right now. As an operator of critical crude infrastructure, the company owns approximately 4,900 kilometres (3,045 miles) of pipelines connecting Canadian oil production to vital U.S. refineries.

What makes South Bow stock particularly attractive for income seekers is its utility-like business model. The company enjoys stable cash flows underpinned by take-or-pay contracts with Canadian oil producers. This market is currently in a growth phase as oil-sands production continues to expand, providing a solid foundation for the company’s revenue and distributable cash flow.

Growth catalysts in 2026 and beyond

South Bow stock is actively growing its cash flow base. A major milestone was reached on March 1, 2026, when the company placed its Blackrod Connection Project into commercial service. This was the first major growth project completed since South Bow spun out of TC Energy in October 2024.

Execution on the Blackrod project was exemplary, as it arrived both on schedule and on budget. The project began contributing to operating cash flow this quarter, a trend expected to continue through 2027. Furthermore, management’s performance has already exceeded expectations: distributable cash flow for 2025 reached $709 million, surpassing the initial guidance of $700 million.

How to turn $50,000 into $2,988 in annual passive income

South Bow pays its dividend in U.S. dollars, which currently offers a lucrative yield for Canadian investors. At current prices, the stock yields approximately 5.9% annually. Here is how a $50,000 investment breaks down:

If the Canadian dollar weakens against the USD in the future, the effective yield for Canadian holders could climb even higher.

Financial health and sustainability

For a dividend to be reliable, it must be well-covered by recurring cash flows. South Bow pays roughly $104 million in quarterly dividends ($416 million annually), which is comfortably covered by its growing distributable cash flow.

The company is also focused on strengthening its balance sheet. South Bow entered 2026 with a net debt position of $4.8 billion. Its leverage metric, measured as net debt-to-normalized earnings before interest, taxes, depreciation and amortization (EBITDA), stood at 4.7 times at the end of 2025, which was significantly better than management’s original expectations for 4.8.

As debt levels decline and new revenue from projects like Blackrod chip in, the dividend’s security should only improve through 2027.

Management may review the dividend for a potential raise as SOBO moves towards attaining a net debt ratio of 4. Your passive income stream could grow.

A Foolish reminder: Diversify

While South Bow offers high-quality, stable cash flows, it’s always advisable to spread your capital across many dividend stocks, sectors and asset classes to diversify your capital and income risks. If $50,000 represents a significant portion of your total portfolio, consider splitting that investment across multiple Canadian dividend payers.

Spreading your capital across various sectors, such as energy, telecommunications, and Real Estate Investment Trusts (REITs), lowers the risk that a single company’s dividend cut will derail your entire passive income strategy. South Bow is an excellent anchor for an income portfolio, but it works best when paired with other reliable TSX dividend giants to ensure long-term financial resilience.

The post How Putting $50,000 Into This High-Yield Dividend Stock Could Generate $2,988 in Annual Passive Income appeared first on The Motley Fool Canada.

Fool contributor Brian Paradza has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

2026

A four-figure amount, such as $2,000, is a modest sum but a potent seed if invested in stocks. Because of the power of compounding, you don’t need to put to work enormous capital for wealth creation. Your small stake can turn into a significant financial cushion over time.

Three Canadian stocks with fundamentally sound businesses can form a safety-and-growth portfolio amid the prevailing market headwinds in 2026. If you have $2,000 free cash today, consider investing in Loblaw (TSX:L), Rogers Sugar (TSX:RSI), or Diversified Royalty Corporation (TSX:DIV).   

Retail fortress

Loblaw, Canada’s largest food and drug retailer, is the ultimate defensive play. For 2026, the $75.7 billion retailer will spend $2.4 billion for store network expansion and renovation. It also aims to enhance supply chain capabilities while creating new jobs across Canada.

The retail advantage stems from the proximity to customers. Around 90% of Canadians are living within 10 kilometres of one of Loblaw’s stores. Furthermore, its delivery service now covers 18 regions following the partnership with DoorDash in June 2022. If you invest today, Loblaw trades at $65.17 per share and pays a modest but super safe 0.87% dividend. The total return in five years is plus-297%.

Stable passive income

Rogers Sugar is for dividend investors seeking stable passive income. Sugar is a low-growth business but it is not only a kitchen staple but a foundational functional ingredient in various industries. Demand for sugar is consistent regardless of economic cycles.

At $6.65 per share, current investors enjoy a 13.3% year-to-date gain and feast on the lucrative 5.4% dividend. A $2,000 position will generate $27.15 every quarter. The $853.9 million company is Canada’s largest producer and distributor of refined sugar and maple products.

RSI rarely experiences wild price swings, always trading within the $6 to $7 range. The most recent quarterly results are strong buy signals for income-focused investors. In Q1 fiscal 2026 (three months ended December 27, 2025), net earnings climbed 80.6% to $28.5 million compared to Q1 fiscal 2025.

Mike Walton, President and CEO of Rogers and operating subsidiary Lantic, said Rogers’ LEAP Project is progressing well and should enhance shareholder value. The expansion project will add approximately 100,000 metric tonnes of additional refined sugar production capacity.  

Diversified exposure

Diversified Royalty offers exposure to ongoing business concerns in North America. The $720 million multi-royalty corporation derives revenue (royalties) from the sales of nine companies in the royalty pool. The Canadian royalty partners are Mr. Lube + Tires, AIR MILES, Mr. Mikes, Oxford Learning Centres, Sutton Group, and BarBurrito.

Stratus Building Solutions and Cheba Hut are the key royalty partners in America. Nurse Next Door, a home care provider, operates in Canada, the U.S., and Australia. For the full-year 2025, net income rose 37.8% year-over-year to $36.7 million. The stock’s performance indicates resilience against massive headwinds. DIV trades at $4.31 per share, up nearly 18% year-to-date versus the broad market’s plus-6%.

Real investing

Real investing is not about the size of the capital. The key is to invest the money in the business’s calibre. Loblaw, Rogers Sugar, and Diversified Royalty are durable engines for sustainable income, occasional capital growth, and a financial cushion in the future.

The post The Best Canadian Stocks to Consider If You Have $2,000 to Invest appeared first on The Motley Fool Canada.

Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool recommends DoorDash. The Motley Fool has a disclosure policy.

2026