$14,000 TFSA Can Generate $711 in Passive Income with These Two Stocks

A Tax-Free Savings Account (TFSA) can be used to generate passive income without requiring much effort. The TFSA is a registered account that allows Canadians to earn interest, dividends, and capital gains tax-free. One way to grow $14,000 in a TFSA into passive income is by investing in two Canadian dividend stocks: Peyto Exploration & Development (TSX:PEY) and Brookfield Infrastructure Partners (TSX:BIP.UN).

Peyto Exploration & Development produces natural gas and natural gas liquids in Alberta. Its shares trade at $25.52 each, giving it a market value of $5.2 billion. The company has climbed 36% over the last year and offers a juicy 5.8% annualized dividend yield. Peyto's strong stock performance is supported by its stronger production, higher realized gas prices, and solid financial results.

Brookfield Infrastructure Partners owns utilities, transport, midstream, and data assets across several global markets. Its units trade at $56.66 each, with a market cap of $25.9 billion. The company provides a 4.5% annualized distribution yield and has seen growth in its funds from operations due to inflation-linked revenue, strong midstream utilization, newly commissioned projects, and recent acquisitions.

To generate reliable passive income inside a TFSA, one could invest roughly $7,000 in each stock. At Peyto's current 5.8% annualized dividend yield, that investment could generate about $396 a year. Meanwhile, about $7,000 invested in Brookfield Infrastructure at its current 4.5% annualized distribution yield could add roughly $315 annually.

Together, this works out to about $711 in annual passive income, all while giving you exposure to two businesses with room to grow over time. If both companies continue raising their payouts, and you reinvest those distributions instead of spending them, your passive income could become even larger in the years ahead.