Investing in dividend stocks can help generate passive income. Moreover, investors should use the Tax-Free Savings Account (TFSA) to invest in high-quality Canadian stocks with fundamentally strong businesses and monthly payouts for tax-free income.

With this background, here are top dividend stocks that can help you generate stable, tax-free income every month. These stocks also offer attractive yields, making them compelling investments near the current price levels.

Whitecap Resources

Investors could consider adding Whitecap Resources (TSX:WCP) stock to their TFSA portfolio for tax-free monthly income. This oil and gas company has distributed $2.1 billion in dividends since 2013 and offers a monthly dividend of $0.061 per share, which reflects a compelling yield of 7.4%.

Whitecap's payouts are supported by its solid financials led by its portfolio of high-quality assets, efficient cost management, and growing production volumes. Over the past decade, the company has consistently expanded its production and funds flow per share by 11% and 12%, respectively, annually. This growth has enabled Whitecap to return substantial cash to its investors through dividends and share buybacks.

The company's focus on high condensate production and pad drilling efficiencies ensures better operational economics, helping it maximize free cash flow. Additionally, Whitecap's long-term organic production potential and strategic asset growth further strengthen its ability to fund higher payouts.

With a low maintenance capital requirement, reduced debt levels, and a strong balance sheet, Whitecap is well-positioned to continue delivering dependable monthly dividends. For investors seeking steady monthly income, Whitecap's solid payouts and high yield make it a compelling choice.

Firm Capital Mortgage Investment Corporation

Firm Capital Mortgage Investment Corporation (TSX:FC) is another monthly dividend stock to add to your portfolio. This non-bank lender specializes in short-term real estate mortgage loans, catering to the residential and commercial sectors. It has also diversified into other real estate-related debt investments. Its dividends are supported by a portfolio of investments generating steady income.

The financial services company's diversified investments, conservative underwriting strategy, market-to-market portfolio, and solid risk management practices position it well to generate steady earnings that support its monthly dividend payments.

Firm Capital currently pays a monthly dividend of $0.078 per share, reflecting an attractive yield of about 7.9%.

Firm Capital focuses on selected niche markets that are underserved by large lending institutions. Moreover, the company's real estate-backed assets add stability by reducing loan loss risks and generating consistent growth.

In addition, Firm Capital's diversified investment approach drives higher earnings from interest, fees, and other income sources. These steady cash flows form the backbone of its reliable dividend distributions, making it a dependable choice for income-focused investors.

Earn $254 tax-free every month

Whitecap Resources and Firm Capital Mortgage Investment Corporation are dependable stocks to earn steady monthly dividend cash. Further, these stocks offer high yields near the current levels, making them compelling investments to add to your TFSA portfolio and generate tax-free income.

The table shows that an investment of $20,000 in each of these stocks can help you earn over $254 in tax-free income per month.