How Investors Can Turn $20,000 Into Income That Just Keeps Coming

Turning $20,000 into a source of income that never seems to run dry is a dream many investors share. One of the most effective ways to achieve this is by focusing on dividend-paying stocks, particularly those with solid fundamentals, that have never cut their payouts and have a commitment to rewarding shareholders.

What makes these companies so reliable is their size and stability. Most are large-cap firms with business models that have weathered everything from recessions to market volatility. They generate steady revenue and earnings and maintain strong free cash flow, which gives them the ability to sustain dividend payments and grow them over time.

When you put $20,000 into high-quality Canadian stocks offering sustainable yields, you can earn stress-free income. Moreover, if you reinvest these dividends rather than cashing them out, that stream has the potential to grow even stronger. Over the years, those reinvested dividends compound, turning your investment into a much larger portfolio that can generate significant income for years.

Against this background, here are two dividend stocks that can help transform $20,000 into a steady stream of passive income.

Enbridge

Enbridge (TSX:ENB) is a top stock for investors seeking reliable, long-term income. The energy infrastructure company has a resilient business model that generates solid distributable cash flow (DCF) across all market conditions, supporting its dividend payments.

Notably, Enbridge's extensive network of liquid pipelines and energy infrastructure connects major demand and supply zones. Thus, its assets witness a high utilization rate and support its DCF. Further, most of Enbridge's earnings stem from assets backed by regulated or long-term contracts and low-risk commercial arrangements. This structure makes it immune to commodity price cycles and ensures predictable cash flow across all market situations, supporting its payouts.

Thanks to its resilient cash flow, Enbridge has never missed a dividend payment since going public in 1953. Moreover, it has raised its annual distributions for 30 consecutive years, most recently with a 3% increase in December 2024 to $0.9425 per share. It offers an attractive yield of 5.6% and maintains a sustainable payout ratio of 60–70% of cash flow.

Over just the past five years, Enbridge has returned $35 billion to shareholders through dividends, and it expects to deliver another $40–$45 billion over the next five years.

Fortis

Fortis (TSX:FTS) is a must-have stock to start a passive income that keeps coming. The leading electric and gas utility company's regulated business model generates steady, predictable cash flows, which support its dividend payouts. Moreover, the majority of assets are in transmission and distribution, which remains immune to risks related to generation and volatility in commodity prices.

Fortis has raised its payout for 51 consecutive years. Currently, it pays a quarterly dividend of $0.615 per share, which translates to a yield of approximately 3.7%.

Fortis plans to pour $26 billion into infrastructure over the next five years. These projects are designed to modernize the grid and address the growing clean energy demand. By 2029, Fortis expects its regulated rate base to reach $53 billion, reflecting an average annual growth rate of about 6.5%. That expansion will push its earnings higher and support 4–6% annual dividend growth through 2029.

Earn over $922 in passive income

Enbridge and Fortis are compelling stocks for investors seeking to build a worry-free, passive income for a lifetime. An investment of $20,000 into these stocks would generate approximately $230.58 in quarterly income, or around $922.32 per year.