It’s still up for debate whether Canadians (and Americans, for that matter) are headed into a recession.
But one thing isn’t up for debate: whether we’re headed towards one or not, everyone can use extra cash in their pockets.
That can mean that planning your TFSA and RRSP to have a diversified portfolio sometimes isn’t enough. Investors should also be looking at ways to receive income through dividends in case their solid stocks aren’t performing as well as they might in the future.
While it can take a hefty investment, creating a dividend portfolio made for passive income by investing in the right stocks at the right time can mean that not only will you get your money’s worth in the long term but monthly as well. That’s why today I’m recommending NFI Group (TSX:NFI), Corus Entertainment (TSX:CJR.B), and Mullen Group (TSX:MTL).
This undervalued bus-and-motor-coach company may not be the most exciting investment, but it’s still a solid one. Granted, the company’s first-quarter results weren’t ideal, sending the stock a touch lower. Revenue decreased by 2% to $567 million, and earnings decreased by 47% to $16.1 million.
But the long-term outlook for this stock is strong, and the lower price makes it the perfect time to buy before it possibly heads to $40 per share in the next 12 months. The company is definitely confident in its long-term outlook, raising its dividend payments to $0.3875 per quarter and 4.57% annually at the time of writing.
An investment of $27,132 would you get you $333 per quarter in passive monthly income at current prices.
This company is also a strong one going through a period of decline, making it yet another perfect buying opportunity. While its short-term outlook looks a bit bearish, over the long term it seems to be a stable company with a stable dividend payout.
Declines in revenue and profits in the last year sent the stock down, but this was due to investments made by the company and using its funds to pay of $117 million in bank loans. Its first-quarter results saw revenue rise 2% year over year to $467 million after raising advertising revenues, but net income fell to $70.1 million.
But while this stock is in recovery mode, investors will continue to receive quarterly payments of $0.06 per share. That means an investment of $43,734 today would make you $333 every quarter.
Just above its 52-week low, Mullen Group is another solid long-term buy. After releasing its first-quarter results, the stock plummeted. While revenue rose 9.4% year over year to $27.5 million (a company record), and net income went up to $10.6 million, analysts downgraded the company, as it didn’t beat estimates.
Things could change for this company as the oil and gas industry improves, and that would improve this stock along with it. In the next 12 months, as conditions improve, analysts believe the stock could climb to $18 per share.
With a dividend yield of 5.01% at the time of writing, investors can receive monthly income of $0.05 per share. So, an investment of $22,577 would give you $333 per quarter.
It’s definitely a hefty investment. The total investment needed to make $1,000 in passive income per quarter comes out to $93,443. But in 12 months, you’ll have a guaranteed extra $4,000 in your pocket.
Should each of these investments achieve the growth expected, in 12 months’ time, that $93,443 investment could be $140,946 in just 12 short months.
Motley Fool Canada's market-beating team has just released a brand-new FREE report revealing 5 "dirt cheap" stocks that you can buy today for under $49 a share.
Our team thinks these 5 stocks are critically undervalued, but more importantly, could potentially make Canadian investors who act quickly a fortune.
Don't miss out! Simply click the link below to grab your free copy and discover all 5 of these stocks now.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. NFI Group and Mullen Group are recommendations of Stock Advisor Canada.