Build a Passive-Income Portfolio With Just $25,000

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Written by Aditya Raghunath at The Motley Fool Canada

Investing in a portfolio of quality dividend-paying stocks with a growing payout allows you to begin a passive-income stream at a low cost. In this article, I have identified two top TSX dividend stocks you can buy to build a passive-income portfolio with just $25,000. Let’s dive deeper.

Valued at a market cap of $90.5 billion, Canadian Natural Resources (TSX:CNQ) is among the largest companies on the TSX. Over the last 30 years, CNQ stock has returned 5,750% to shareholders. However, if we adjust for dividend reinvestments, cumulative returns are much higher at 10,360%.

So, a $10,000 investment in CNQ stock three decades back would be worth more than $1 million today, easily crushing the broader market returns. Despite these outsized gains, Canadian Natural Resources currently offers you a tasty dividend yield of 4.8%.

Last month, the energy giant unveiled its 2025 budget, highlighting a commitment to create value through strategic capital allocation and operational efficiency. CNR is Canada’s largest crude oil producer and second-largest natural gas producer. In 2025, it plans to invest $6.15 billion in capital expenditures, with $3.2 billion allocated to conventional exploration and production and $2.815 billion to thermal and oil sands operations.

CNR’s strategic advantage lies in its diversified asset base, with approximately 57% of production coming from long-life, low-decline assets, resulting in a corporate decline rate of just 11%.

For 2025, CNR’s operational focus includes an extensive drilling program of 361 wells and continued development of thermal projects, including new SAGD pads at Kirby and Pike. CNR is also enhancing its oil sands operations through debottlenecking and reliability improvements, with 65% of its liquids production comprised of high-value synthetic crude oil, light crude, and natural gas liquids.

Notably, Canadian Natural Resources continued its track record of shareholder returns, marking its 25th consecutive year of dividend increases with a 3% raise to $2.25 per share annually. In the last 10 years, CNQ has increased its dividends per share by 16.8% annually. Comparatively, analysts expect the payout to rise by 9.7% over the next two years.

Brookfield Asset Management (TSX:BAM) demonstrated strong performance in the fourth quarter (Q4) of 2024, with significant growth across key metrics. It ended the year with total assets under management of over US$1 trillion, with fee-bearing capital of US$539 billion, representing an 18% year-over-year increase.

Its Q4 fee-related earnings reached US$677 million or US$0.42/share, up 17% from the prior year, while distributable earnings grew to US$649 million or US$0.40/share, an 11% increase. The fee-related earnings margin improved to 59%, reflecting operational efficiency and scale benefits.

BAM’s diversified business model spans multiple segments, including credit, infrastructure real estate, private equity, and renewable power & transition. This diversification has helped maintain stable returns across market cycles.

BAM had a record fundraising year in 2024, raising US$137 billion in total capital, with US$29 billion raised in Q4 alone. Its capital deployment remained strong, with US$48 billion deployed throughout 2024 and US$16 billion in Q4. Moreover, the alternative asset manager maintains significant dry powder with US$115 billion in uncalled fund commitments.

BAM pays shareholders an annual dividend of US$1.52 per share, which translates to a yield of 2.8%. While the yield may not seem too high, the company is forecast to grow these payouts by 13.9% annually over the next two years.

Even though these companies are fundamentally strong, investing $25,000 in just two TSX stocks is risky. It’s advisable to diversify your dividend portfolio and lower overall risk by identifying other stocks with a high yield and a growing payout.

The post Build a Passive-Income Portfolio With Just $25,000 appeared first on The Motley Fool Canada.

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Fool contributor Aditya Raghunath has no position in any of the stocks mentioned. The Motley Fool recommends Brookfield Asset Management and Canadian Natural Resources. The Motley Fool has a disclosure policy.

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