Being an investor in Canada in 2020 is fantastic because you have plenty of options to create passive income streams. You can use passive income to increase your potential spending power or to accumulate substantial funds for retirement.
Today I want to discuss the two proven ways to make your money earn for you.
The real estate market is a phenomenal play for earning income. Investing in real estate investment trusts (REITs) and owning shares of dividend-paying companies can provide you with remarkable returns.
To this end, I’m am going to discuss SmartCentres REIT (TSX:SRU.UN) and Keyera Corporation (TSX:KEY).
Investing in REITs
Investing in actual income-generating real estate could prove beneficial due to rising property value and rental income. However, it comes with downsides. It requires significant capital upfront to purchase a property, and you need to put in a lot of effort with the upkeep of a property.
Investing in REITs, on the other hand, allows you to enjoy the benefits of the real estate sector without the hassles that come with it. SmartCentres REIT, for instance, is a high-quality real estate stock to consider. The $4.33 billion market capitalization REIT can be an ideal safeguard against recession and inflation.
The REIT’s portfolio consists of assets such as retail stores, destination outlets, unenclosed shopping centres, and power centres. Investing in SmartCentres could be a smart decision due to the diversity it offers. Around 115 properties managed by the REIT have Walmart as the tenant – an anchor tenant that will be around for a while.
The REIT is trading for $29.92 at the time of this writing, offering shareholders a juicy 6.15% dividend yield.
Investing in dividend-paying stocks
Keyera is a stock that can help you earn through its stellar dividends. Keyera is a favourite stock for many Canadian retiree investment portfolios. It’s a midstream oil and gas company with a $6.91 billion market cap. It has been a significant part of Canada’s energy sector for the past 20 years now.
The company transports, stores, and markets natural gas liquids as well as iso-octane. It operates in the U.S. and Canada. Keyera’s Gathering and Processing business units work with a network of almost 4,000 kilometers of pipelines.
Keyera also boasts a portfolio of 17 natural gas-processing plants located in the Western Canada Sedimentary Basin. Keyera has become one of the largest independent midstream energy companies in Canada in just two decades.
The stock has been consistently on the rise for the past four years, paying investors a 6.05% dividend yield. The energy company expects its expansion projects to proliferate and looks like a likely investment for the long term.
You need to consider reliable income-generating assets in your portfolio if you want to enjoy passive income to meet your financial goals. If you wish to increase your spending money or accumulate funds for retirement, REITs and dividend stocks could be beneficial for you.
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 Adam Othman has no position in any of the stocks mentioned.