Any chance to earn tax-free passive income, should be an opportunity that Canadian investors maximize. Fortunately, Canadians can do just that by investing in stocks through their TFSA (Tax-Free Savings Account).
Pay no tax and grow your passive income
Whenever you invest in your TFSA all income earned has no tax consequence. There is no reporting to CRA (Canada Revenue Agency), and no tax is paid. It’s a great gift from the government to help Canadians grow and build their lifetime savings.
The current total TFSA contribution limit is $88,000. Say you only have $50,000 to invest, here is a three-stock mini portfolio that generates attractive passive income and could earn as much as $209.26 averaged monthly.
A top energy stock for any TFSA wanting passive income
Canadian Natural Resources (TSX:CNQ) might be a cyclical energy stock, but it is a dividend-paying all star. The company has paid and grown its dividend for 23 years. In fact, its base dividend has risen by a +20% compounded annual growth rate in that time.
CNQ is an incredibly well-managed energy production company. Its operations are extremely efficient and low cost. Likewise, it has multiple decades of reserves, which should ensure its operational longevity. Lastly, its management team is heavily invested alongside shareholders. Their incentive to deliver strong returns for shareholders are the same as yours.
At $59.17 per share, CNQ stock trades with a 4.5% dividend yield. A $16,666 investment in this stock would earn $177.03 of quarterly passive income in your TFSA. Averaged monthly, that would equal $59.01.
A top infrastructure stock in Canada
If you are looking for a little bit higher dividend yield, Pembina Pipeline (TSX:PPL) is another good stock for a TFSA. With a market cap of $25 billion, it is one of the largest energy infrastructure players in Western Canada. It owns and operates pipelines, midstream and gas processing plants, storage facilities, and propane export terminals.
Oil prices have remained relatively resilient, even despite concerns around the economy. That should continue to be a tailwind for Pembina’s business, especially as energy production activity continues to grow in Western Canada. It is particularly well positioned to benefit from the potential to export LNG over the coming few years.
This TFSA stock earns a 5.75% dividend yield at a price of $46.20. A $16,666 investment in Pembina would earn $234.90 of tax-free passive income every quarter, or $78.3 averaged monthly.
TELUS Corp. (TSX:T) is a good stock pick for earning TFSA passive income. Its business has a great combination of income, growth, and safety. TELUS’s primary business is providing cellular and internet services to subscribers across Canada. Its revenues are derived from an essential, contracted service, so it has a predictable sightline as to its profits and cash flows.
TELUS is unique in that it is integrating its services across several digital mediums. These include security and home automation, agriculture, healthcare and benefits, and IT/customer experience/artificial intelligence. At a price of $27 per share, the stock is barely factoring the imbedded, outsized growth within these businesses.
Today, this TFSA stock earns a 5.18% dividend yield. Put $12,500 to work in TELUS stock and you’d earn $215.60 every quarter, or $71.87 monthly. TELUS has a great history of growing its dividend by over 6% a year, so investors get the bonus of growing passive income if they are patient with this stock.
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.
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.
TORONTO – Canada’s main stock index was little changed in late-morning trading as the financial sector fell, but energy and base metal stocks moved higher.
The S&P/TSX composite index was up 0.05 of a point at 24,224.95.
In New York, the Dow Jones industrial average was down 94.31 points at 42,417.69. The S&P 500 index was down 10.91 points at 5,781.13, while the Nasdaq composite was down 29.59 points at 18,262.03.
The Canadian dollar traded for 72.71 cents US compared with 73.05 cents US on Wednesday.
The November crude oil contract was up US$1.69 at US$74.93 per barrel and the November natural gas contract was up a penny at US$2.67 per mmBTU.
The December gold contract was up US$14.70 at US$2,640.70 an ounce and the December copper contract was up two cents at US$4.42 a pound.
This report by The Canadian Press was first published Oct. 10, 2024.
