Transform Your TFSA Into a Cash-Crushing Machine With Just $20,000

Investing $20,000 in high-quality dividend stocks could turn your Tax-Free Savings Account (TFSA) into a cash-crushing machine. Further, one should focus on top TSX stocks that pay monthly dividends and have a proven record of sustainable distributions. Monthly dividends provide a steadier stream of cash, making it easier to cover regular expenses or reinvest more frequently.

Notably, reinvesting dividends can further accelerate portfolio growth through compounding, especially when done inside a TFSA where gains and income are not taxed.

Against this background, here are the top Canadian stocks that can transform your TFSA into a cash-crushing machine. These companies with stable cash flows, strong balance sheets, and resilient business models are better equipped to support their dividends through economic cycles.

SmartCentres REIT

SmartCentres REIT (TSX:SRU.UN) is a top stock to add to your TFSA for steady monthly cash flow. With a long history of consistent monthly distributions and a current yield of approximately 6.8%, the REIT is a compelling stock to turn your portfolio into a cash-crushing machine.

SmartCentres’ high-quality real estate portfolio, including 197 mixed-use properties, continues to attract strong tenant demand, resulting in stable occupancy, dependable rental income, and steady net operating income that supports regular distributions.

Further, SmartCentres’ real estate portfolio is focused on essential retail, anchored by nationally recognized brands. These tenants tend to be resilient across economic cycles, helping the REIT maintain reliable rent collection and high occupancy even during periods of uncertainty. As of the end of the third quarter, occupancy stood at 98.6%, reflecting ongoing demand for its properties.

Beyond its core retail assets, SmartCentres is expanding its mixed-use developments, broadening and diversifying its income base. Moreover, a large land bank and a solid balance sheet position the REIT to generate sustainable cash flow growth and continue delivering dependable monthly income to TFSA investors.

Whitecap Resources

Whitecap Resources (TSX:WCP) is a reliable option for investors seeking steady passive income. The Canadian oil and gas company maintains a steady monthly payout, and currently pays $0.061 per share, translating into an attractive yield of roughly 6.3%.

Over the long term, the firm has shown commitment to return cash to its shareholders. For instance, it has paid shareholders about $3 billion in dividends between January 2013 and December 2025.

The company targets a base dividend payout ratio of 20–25%, which allows it to comfortably fund operations, reinvest in growth, and navigate fluctuations in commodity prices. Management also plans to increase the base dividend by 1–3% annually.

Operationally, Whitecap benefits from a diversified asset base and ongoing efficiency improvements. Its disciplined capital allocation, low debt levels, and a solid inventory of high-quality drilling locations augur well for long-term growth, supporting both earnings and dividend growth.

Earn over $109 per month in tax-free passive income

Consider splitting $20,000 equally between SmartCentres REIT and Whitecap Resources. Together, these two income-generating investments can deliver dividends of more than $109 per month. Because dividends earned in a TFSA are completely tax-free, every dollar of income stays in your pocket. Over time, reinvesting those untaxed dividends can significantly accelerate portfolio growth, turning a simple income strategy into a long-term wealth-building engine.

CompanyRecent PriceNumber of SharesDividendTotal PayoutFrequencySmartCentres REIT$27.02370$0.154$56.98MonthlyWhitecap Resources$11.59862$0.061$52.58MonthlyPrice as of 01/20/2025

The post Transform Your TFSA Into a Cash-Crushing Machine With Just $20,000 appeared first on The Motley Fool Canada.

Should you invest $1,000 in Whitecap Resources right now?

Before you buy stock in Whitecap Resources, consider this:

The Motley Fool Canada team has identified what they believe are the top 10 TSX stocks for 2026… and Whitecap Resources wasn’t one of them. The 10 stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 … if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $21,827.88!*

Now, it’s worth noting Stock Advisor Canada’s total average return is 102%* – a market-crushing outperformance compared to 81%* for the S&P/TSX Composite Index. Don’t miss out on our top 10 stocks, available when you join our mailing list!

Get the 10 stocks instantly #start_btn6 { background: #0e6d04 none repeat scroll 0 0; color: #fff; font-size: 1.2em; font-family: 'Montserrat', sans-serif; font-weight: 600; height: auto; line-height: 1.2em; margin: 30px 0; max-width: 350px; text-align: center; width: auto; box-shadow: 0 1px 0 rgba(0, 0, 0, 0.5), 0 1px 0 #fff inset, 0 0 2px rgba(0, 0, 0, 0.2); border-radius: 5px; } #start_btn6 a { color: #fff; display: block; padding: 20px; padding-right:1em; padding-left:1em; } #start_btn6 a:hover { background: #FFE300 none repeat scroll 0 0; color: #000; } @media (max-width: 480px) { div#start_btn6 { font-size:1.1em; max-width: 320px;} } margin_bottom_5 { margin-bottom:5px; } margin_top_10 { margin-top:10px; }

* Returns as of January 15th, 2026

More reading

• Could This Undervalued Canadian Stock Be Your Ticket to Millionaire Status?
• Got $1,000? 3 REITs to Buy and Hold Forever
• My 3 Favourite Stocks for Monthly Passive Income
• Want a 6% Yield? 3 TSX Stocks to Buy Today
• 2 Undervalued TSX Stocks to Buy in January and Never Look Back

Fool contributor Sneha Nahata has no position in any of the stocks mentioned. The Motley Fool recommends SmartCentres Real Estate Investment Trust and Whitecap Resources. The Motley Fool has a disclosure policy.