TFSA Investors: $45,000 in These 3 TSX Stocks Can Help You Earn $2,500/Year in Tax-Free Dividends

Investors can always earn a passive income stream by purchasing blue-chip dividend stocks. Due to the ongoing sell-off in the Canadian market, the forward yields of dividend-paying companies are extremely attractive. Further, if these investments are held in a TFSA (Tax-Free Savings Account), any income earned via dividends and capital gains is completely tax-free.

Historically, dividend stocks have outpaced the broader markets over time due to their ability to generate consistent profits and expand earnings, which in turn support dividend increases. So, if you have $45,000 to invest right now, here are three TSX stocks that can help you earn around $2,500 in annual passive income and benefit from long-term capital gains.

TC Energy

An investment of $15,000 in TC Energy (TSX:TRP)(NYSE:TRP) stock would allow you to buy 249 shares of the company. Given its annual dividend of $3.60 per share, you would earn $896 in dividend payouts each year, translating to a yield of almost 6%.

TC Energy is not a high-growth company and is valued at a market cap of $61 billion. It is a well-diversified energy infrastructure company that operates a network spanning 93,300 km of natural gas pipelines. Additionally, it has a regulated natural gas facility.

Its cash flows are tied to long-term contracts insulating TC Energy from fluctuations in commodity prices. TC Energy continues to invest in capital expenditures, which will expand its base of cash-generating assets and drive cash flows and dividends higher in the next few years.

The energy heavyweight has increased dividend payouts at an annual rate of 6.6%.

Algonquin Power & Utilities

A diversified Canadian utility, Algonquin Power & Utilities (TSX:AQN)(NYSE:AQN) has two primary business segments. A $15,000 investment in AQN stock will allow shareholders to buy 1,011 shares of the company. It pays an annual dividend of $1 per share, translating to annual dividends of $1,011 each year.

Algonquin’s regulated services include distribution across electric, natural gas, and water distribution utilities in the Americas. Its clean energy business operates renewable and thermal generation assets. In the last year, the regulated business accounted for 88% of total sales and 94% of total operating income.

AQN has increased dividends at an annual rate of 12.4% in the last decade. In fact, AQN stock has returned 669% to investors since its IPO in October 2009.

Brookfield Renewable Partners

The final dividend stock on my list is Brookfield Renewable Partners (TSX:BEP.UN)(NYSE:BEP). An investment of $15,000 in the stock would allow investors to buy 376 shares of the company resulting in annual dividend payouts of $654.24. One of the largest clean energy companies in the world, BEP has already returned 2,000% to investors in the last two decades.

But the global shift towards renewable energy solutions will be a key driver for BEP in the next two decades. The stock is also trading at a discount of more than 25% compared to consensus price target estimates.

The bottom line

A $45,000 investment equally distributed among the three stocks will allow you to earn over $2,500 in annual dividend income, indicating an average yield of 5%. If these payouts increase by 5% annually, your dividend income will increase to $6,700/year over two decades.

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