A Simple Way to Turn $25,000 in TFSA Savings Into Consistent Cash Flow

Building a passive-income stream doesn’t always require a massive portfolio. Investors who pick the right stocks, along with a steady stream of TFSA savings, can build a solid income-producing portfolio.

Here’s a look at three Canadian dividend stocks to steer those TFSA savings toward building that passive-income portfolio.

Enbridge provides the portfolio’s income foundation

Enbridge (TSX:ENB) is a natural starting point for an income-focused portfolio. The energy infrastructure behemoth operates pipelines, natural gas utilities, storage assets and renewable power infrastructure across North America.

The necessity and sheer volume of energy involved make Enbridge one of the more defensively positioned investments on the market. Its businesses benefit from a mix of long-term contracts and regulated utility operations.

For investors, this means that Enbridge generates a predictable revenue stream that allows the company to invest in growth initiatives from its multi-billion-dollar backlog and pay out a quarterly dividend.

As of the time of writing, Enbridge offers a yield of 5.06%. Adding to that appeal is the fact that Enbridge has provided investors with annual bumps to that dividend for over 30 consecutive years. That includes a 3% increase for 2026.

That combination makes Enbridge a suitable candidate for some of those TFSA savings. Investors receive a strong yield today, and continued dividend growth helps the income stream expand over time.

Fortis adds stability and long-term dividend growth

While Enbridge may offer some defensive appeal to investors, Fortis (TSX:FTS) offers defensive appeal that’s on an entirely different level.

Fortis is one of the largest utility stocks in North America. The company provides regulated electric and gas utility services to customers in Canada, the U.S. and the Caribbean.

Those operations are largely regulated, providing Fortis with predictable revenue and cash flow, even when the market isn’t cooperating.

That stable revenue stream allows Fortis to invest in growth and pay a quarterly dividend. As of the time of writing, Fortis offers a yield of 3.10%.

Perhaps most impressive is Fortis’s growth. The utility has increased its dividend for an incredible 52 consecutive years, making it one of just two Dividend Knights in Canada. Fortis is also targeting 4%-6% increases through 2030.

For income investors looking to allocate their TFSA savings, Fortis provides a great mix of stability and income growth.

Slate Grocery REIT boosts cash flow with monthly income

Wrapping up the trio of picks for investors to steer their TFSA savings toward is Slate Grocery REIT (TSX:SGR.UN). Slate is a Canadian real estate investment trust focused on retail properties.

More specifically, Slate owns a portfolio of over 100 grocery-anchored properties in the U.S. Grocery stores are highly defensive and generate traffic. This helps to support demand for secondary tenants that surround the anchor tenant.

Necessity-based retail, such as grocery stores, provides an element of defensive appeal. The secondary tenants provide another complementary revenue stream for the REIT.

Often, these properties are restaurants, banks, pharmacies and other small businesses that provide their own traffic to the main tenant.

Turning to income, Slate offers a monthly distribution paying an attractive yield of 6.93%. That makes Slate the income accelerator for any TFSA savings.

Turn TFSA savings into an income-producing portfolio

An initial $25,000 investment allocated across the three holdings can provide an annual income of just over $1,270.

Even better, investors who aren’t ready to draw on that income yet can choose to reinvest it, allowing it to continue compounding until needed.

That can help turn a modest TFSA dividend portfolio into a larger source of tax-free passive income over time.

Here’s how that $25,000 gets split out for the three stocks mentioned above.

CompanyRecent PriceTotal InvestedNo. of SharesDividendTotal PayoutFrequencyEnbridge$76.70$8,000104$3.88$403.52QuarterlyFortis$81.88$8,00097$2.54$246.38QuarterlySlate Grocery REIT$17.71$9,000508$1.23624.84Monthly    Total:$1,274.74 

The post A Simple Way to Turn $25,000 in TFSA Savings Into Consistent Cash Flow appeared first on The Motley Fool Canada.

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More reading

• 2 Canadian Dividend Stocks Perfect for Retirees
• 5 TSX Dividend Stocks With Solid Yields Built for Steady Cash Flow in Any Market
• 2 Dividend Stocks That Belong in Almost Every Investor’s Portfolio
• What the Typical 40-Year-Old Canadian Has in Their TFSA and RRSP
• TFSA Income: 2 Dividend Stocks to Hold for the Next 20 Years

Fool contributor Demetris Afxentiou has positions in Enbridge and Fortis. The Motley Fool recommends Enbridge, Fortis, and Slate Grocery REIT. The Motley Fool has a disclosure policy.