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Invest $10,000 in 2 TSX Stocks for $614/Year in Dividend Income – Yahoo Canada Finance

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Written by Sneha Nahata at The Motley Fool Canada

Shares of dividend-paying companies can be a compelling investment to start a passive-income stream. However, investors should take caution and consider Canadian stocks with strong financial health, stellar dividend payment and growth history, well-covered payout ratio, and management’s commitment to enhancing shareholders’ returns.

Moreover, one should focus on diversifying the income portfolio. This way, one can generate worry-free dividend income in all market conditions. With this backdrop, let’s delve into two fundamentally strong Canadian dividend stocks that can help you earn over $614/year with a $10K investment.

An energy stock

Investors seeking reliable dividend income stocks could consider Enbridge (TSX:ENB). The company that transports oil and gas is popular for its solid dividend payment history and management’s commitment to returning higher cash to its shareholders. Adding to these positives, Enbridge stock offers a high and well-protected yield.

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For instance, this Dividend Aristocrat has paid dividends for over 69 years and increased it for 29 consecutive years. Meanwhile, this energy company offers a high yield of 7.5%.

Looking ahead, Enbridge’s continued investments in conventional and renewable energy projects will help the company capitalize on the energy demand and deliver solid distributable cash flow (DCF) per share. In addition, benefits from power-purchase agreements and regulated cost-of-service tolling frameworks will likely drive its earnings and DCF, supporting higher payouts.

Enbridge’s leadership expects its earnings and DCF to increase at a mid-single-digit rate in the long term. This will enable the company to grow its annual dividend at a similar pace in future years. Moreover, Enbridge maintains a target payout ratio of 60-70% of DCF, which is sustainable in the long term.

A bank stock

From the energy sector, let’s turn to top Canadian banks. These banks have been famous for paying dividends for more than 100 years, making them a dependable investment option for investors seeking passive income.

Among top banks, investors could consider investing in Bank of Montreal (TSX:BMO) stock. This financial services company has paid uninterrupted dividends for over 195 years, the longest dividend-paying corporation in Canada. Further, Bank of Montreal has increased its dividend at a compound annual growth rate (CAGR) of 5% in the past 15 years.

The financial services giant’s stellar dividend payouts are supported by its ability to deliver profitable growth. Its diversified revenue sources, high-quality loans, and solid deposit base drive its top line. Further, steady credit performance and operating efficiency cushion its earnings and drive its payouts.

Bank of Montreal expects its earnings to increase at a CAGR of 7-10% in the medium term, enabling it to grow its dividend at least at a mid-single-digit rate. Based on its closing price of $124.23 on April 26, Bank of Montreal stock offers a yield of 4.87%.

The bottom line

Enbridge and Bank of Montreal are reliable investments that generate consistent dividend income. The table shows that an investment of $5,000 in each stock can help you earn over $153.73 every quarter, or about $614.92/year.

Company

Recent Price

Number of Shares

Dividend

Total Payout

Frequency

Enbridge

$48.96

102

$0.915

$93.33

Quarterly

Bank of Montreal

$124.23

40

$1.51

$60.40

Quarterly

The post Invest $10,000 in 2 TSX Stocks for $614/Year in Dividend Income appeared first on The Motley Fool Canada.

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Fool contributor Sneha Nahata has no position in any of the stocks mentioned. The Motley Fool recommends Enbridge. The Motley Fool has a disclosure policy.

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Tesla shares soar more than 14% as Trump win is seen boosting Elon Musk’s electric vehicle company

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NEW YORK (AP) — Shares of Tesla soared Wednesday as investors bet that the electric vehicle maker and its CEO Elon Musk will benefit from Donald Trump’s return to the White House.

Tesla stands to make significant gains under a Trump administration with the threat of diminished subsidies for alternative energy and electric vehicles doing the most harm to smaller competitors. Trump’s plans for extensive tariffs on Chinese imports make it less likely that Chinese EVs will be sold in bulk in the U.S. anytime soon.

“Tesla has the scale and scope that is unmatched,” said Wedbush analyst Dan Ives, in a note to investors. “This dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players.”

Tesla shares jumped 14.8% Wednesday while shares of rival electric vehicle makers tumbled. Nio, based in Shanghai, fell 5.3%. Shares of electric truck maker Rivian dropped 8.3% and Lucid Group fell 5.3%.

Tesla dominates sales of electric vehicles in the U.S, with 48.9% in market share through the middle of 2024, according to the U.S. Energy Information Administration.

Subsidies for clean energy are part of the Inflation Reduction Act, signed into law by President Joe Biden in 2022. It included tax credits for manufacturing, along with tax credits for consumers of electric vehicles.

Musk was one of Trump’s biggest donors, spending at least $119 million mobilizing Trump’s supporters to back the Republican nominee. He also pledged to give away $1 million a day to voters signing a petition for his political action committee.

In some ways, it has been a rocky year for Tesla, with sales and profit declining through the first half of the year. Profit did rise 17.3% in the third quarter.

The U.S. opened an investigation into the company’s “Full Self-Driving” system after reports of crashes in low-visibility conditions, including one that killed a pedestrian. The investigation covers roughly 2.4 million Teslas from the 2016 through 2024 model years.

And investors sent company shares tumbling last month after Tesla unveiled its long-awaited robotaxi at a Hollywood studio Thursday night, seeing not much progress at Tesla on autonomous vehicles while other companies have been making notable progress.

Tesla began selling the software, which is called “Full Self-Driving,” nine years ago. But there are doubts about its reliability.

The stock is now showing a 16.1% gain for the year after rising the past two days.

The Canadian Press. All rights reserved.

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S&P/TSX composite up more than 100 points, U.S. stock markets mixed

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TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.

The S&P/TSX composite index was up 103.40 points at 24,542.48.

In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.

The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.

The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.

The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.

This report by The Canadian Press was first published Oct. 16, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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S&P/TSX up more than 200 points, U.S. markets also higher

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TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.

The S&P/TSX composite index was up 205.86 points at 24,508.12.

In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.

The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.

The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.

The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.

This report by The Canadian Press was first published Oct. 11, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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