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 down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
