INVEST $25,000 IN THIS DIVIDEND STOCK FOR $985.78 IN ANNUAL PASSIVE INCOME
Generating reliable monthly income through dividends has never been more attractive. With interest rates still uncertain and inflation cutting into everyday spending, Canadians are looking for ways to stretch their savings and create dependable cash flow. Thatâs where dividend stocks come in. When chosen wisely, these offer more than just capital appreciation, the stocks can fund your lifestyle, especially in retirement or during career transitions. One dividend stock that deserves a closer look for income-seekers is Tamarack Valley Energy (TSX:TVE).
Why Tamarack
Tamarack Valley is an oil and gas producer headquartered in Calgary. While energy stocks can be volatile, these also offer some of the best yields on the TSX when commodity prices are favourable. And right now, Tamarack is in a position where its free cash flow supports both its operations and a consistent dividend. The dividend stock has taken steps in recent years to grow through acquisitions while maintaining capital discipline, which is important for investors relying on stable payouts.
Tamarack Valley shares are trading around $3.88 at writing. The stock currently pays a monthly dividend of $0.01275 per share, which works out to $0.153 annually. That gives it a dividend yield of approximately 3.97%. While that yield may not be as sky-high as some riskier plays on the TSX, Tamarack makes up for it with a conservative payout ratio and strong operational performance. In its latest earnings release, the company reaffirmed its focus on free cash flow generation and shareholder returns. So, how much could you earn?
This investment would generate approximately $985.78 in annual passive income. Thatâs about $82 per month, deposited into your account without lifting a finger. Over time, if reinvested, those dividends can compound and grow your income even further.
A strong choice
Now, thereâs always the question of risk. Energy companies are tied to the price of oil and gas, and that can be unpredictable. But Tamarack has done a good job managing costs and focusing on assets that generate consistent returns. The dividend stock also maintains a payout ratio of around 50%, which means it only pays out half of its earnings as dividends. That leaves plenty of room for flexibility, whether itâs investing in new projects or weathering a dip in commodity prices.
The Canadian energy sector is also somewhat protected by domestic demand and infrastructure advantages. Tamarack’s assets are primarily in Alberta, which gives it logistical efficiency. Itâs not trying to be the flashiest oil and gas stock on the TSX; itâs trying to be steady, dependable, and investor-friendly. For income investors, thatâs exactly the kind of attitude you want.
Another upside? Tamarack Valley has been very focused on returning capital to shareholders while maintaining a healthy balance sheet. Itâs not just about paying a dividend; itâs about doing it sustainably. In a market where many companies stretch their payouts thin, Tamarackâs cautious approach is refreshing.
Bottom line
So, is this a set-it-and-forget-it stock? Maybe not completely. Energy stocks do require some attention, especially if oil prices start swinging dramatically. But as part of a diversified income strategy, Tamarack Valley offers real appeal. It gives you exposure to the energy sector without the risks of speculative juniors or the lower yields of massive integrated firms.
If youâre looking to turn $25,000 into over a thousand dollars a year in passive income and get paid monthly while youâre at it, Tamarack Valley Energy is worth serious consideration. Just make sure to keep an eye on the broader energy market and the companyâs earnings reports to make sure the fundamentals stay strong.
In the meantime, enjoy those monthly cheques. Whether youâre using them to top up your grocery budget, cover a streaming subscription, or just keep some cash on hand, itâs money working for you. And thatâs the goal, right? Let your investments carry some of the load while you focus on living your life.
The post Invest $25,000 in This Dividend Stock for $985.78 in Annual Passive Income appeared first on The Motley Fool Canada.
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Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
2025-05-13T20:46:22Z