Transform Your TFSA into $300 in Monthly Tax-Free Earnings

With economic uncertainty lingering, building reliable passive income has become increasingly important. It offers financial stability, cushions your portfolio against market volatility, and helps accelerate your journey toward long-term financial freedom. In today’s relatively low-interest-rate environment, high-yielding, monthly-paying dividend stocks stand out as an attractive way to generate consistent cash flow. Moreover, holding these investments in a TFSA (Tax-Free Savings Account) allows investors to earn tax-free income and maximize overall returns.

With that in mind, here are my three top picks. A combined investment of $66,000 allocated equally among these stocks could generate more than $300 in monthly passive income, creating a meaningful and consistent cash stream for investors.

NorthWest Healthcare Properties REIT

First on my list is NorthWest Healthcare Properties REIT (TSX: NWH.UN), which delivered a solid fourth-quarter performance yesterday. The REIT reported revenue of $107.6 million, up 4.8% year over year, driven by same-property revenue growth and favourable currency translation, partially offset by the disposition of non-core assets over the past four quarters. Same-property net operating income (NOI) rose 3% to $65 million, supported by inflation-linked rent escalations, rentalized capital expenditures, and improved recoveries. During the quarter, the REIT also completed 286,850 square feet of new, renewed, and early leasing activity, achieving a strong 85% renewal rate.

General and administrative expenses increased by $0.8 million to $11.8 million, primarily due to lower salary capitalization amid reduced development activity and unfavourable currency movements at foreign subsidiaries. Net losses widened from $2.9 million in the prior-year quarter to $27 million. However, excluding one-time items, adjusted funds from operations (AFFO) rose 20% year over year to $0.12 per unit, improving the AFFO payout ratio to 75% from 90% a year earlier.

The REIT has also enhanced its financial flexibility by lowering its debt-to-gross book value from 50% at the end of 2024 to 46.4%. As of the fourth quarter, liquidity stood at $465.5 million, including cash and undrawn credit facilities. With strengthening fundamentals and a healthier balance sheet, management remains focused on driving organic growth and selective acquisitions to support sustainable distributions.

Currently, NorthWest Healthcare pays a monthly distribution of $0.03 per unit, yielding about 6% on an annualized basis.

Pizza Pizza Royalty

Another monthly dividend stock I consider an attractive buy right now is Pizza Pizza Royalty (TSX: PZA). The company operates the Pizza Pizza and Pizza 73 brands through an asset-light franchise model, earning royalties based on franchisee sales. This structure makes its financial performance less sensitive to commodity price swings and rising labour costs, while generating stable and predictable cash flows. To help smooth out the seasonal fluctuations typical in the restaurant industry, the company distributes equal monthly dividends to investors. It currently pays $0.0775 per share each month, translating into a forward yield of approximately 5.7%.

So far this year, PZA has expanded its royalty pool by adding 39 new restaurants while removing 19 locations that ceased operations, resulting in net growth. In addition to footprint expansion, management is investing in digital platform enhancements, faster service initiatives, and menu innovation to drive same-store sales growth.

Given its resilient, asset-light business model and ongoing growth initiatives, PZA appears well-positioned to sustain—and potentially increase—its dividend payouts, making it an appealing choice for income-focused investors.

Whitecap Resources

My final pick is Whitecap Resources (TSX: WCP), which recently delivered a strong fourth-quarter performance. The company’s free cash flow rose 22.9% year over year to $186 million, supported by efficient operational execution and continued integration efforts following its merger with Veren.

Whitecap also closed the quarter with a solid balance sheet, reporting a net debt-to-annualized funds flow ratio of 1.0. In addition, it had approximately $1.5 billion in liquidity at quarter-end, positioning it well to fund ongoing development and growth initiatives.

From a resource standpoint, the company holds 2.2 billion barrels of oil equivalent in proved plus probable reserves, with a reserve life index exceeding 16 years. To further strengthen its production base, Whitecap plans to invest between $2 billion and $2.1 billion this year. Backed by these investments, management expects 2026 average production to range between 370,000 and 375,000 boe/d, with the midpoint representing a 21.2% increase from the prior year.

Given its expanding production profile, disciplined capital allocation, and prudent risk management strategy, Whitecap appears well-positioned to sustain and potentially enhance its dividend payments. The company currently pays a monthly dividend of $0.0608 per share, yielding approximately 5.4%.