The CRA extended the Canada Emergency Response Benefit (CERB) from four months to six months. That’s good news for Canadians who need the emergency benefit.
However, the CERB of $2,000 per month is going to stop eventually. Thankfully, it doesn’t mean your passive income has to stop.
Having a permanent passive income will help a lot during economic downturns, during which there can be mass unemployment.
Even when things are fine, the extra income can help pay the bills or improve your lifestyle. You’d be able to spend it on whatever you need or want. Alternatively, you can also reinvest for even more passive income down the road.
Here are some solid dividend stocks you can consider for your passive-income fund.
Toronto-Dominion Bank stock
2020 is a bad year for banks, including quality ones like Toronto-Dominion Bank (TSX: TD)(NYSE: TD). However, it’s a good year to buy bank stocks. There will be volatility in TD stock, as provisions for credit losses are going to be higher likely through 2020 compared to the same periods in 2019.
However, it’s an excellent long-term opportunity to buy TD stock this year if you believe the North American economy will recover in time.
In normal markets, it would be a wonderful opportunity to buy TD stock for a 4% yield. Now, investors can scoop up the shares for a 5.2% yield. That’s 30% greater in income!
Don’t buy all at once, though, because volatility can provide even better buying opportunities. Starting a position makes sense for those who want to begin receiving TD dividends for passive income now.
BCE stock
People are staying longer at home due to the COVID-19 pandemic. BCE (TSX: BCE)(NYSE: BCE) is set to benefit as a big telecom company that has significant market share.
Canadians either need data plans for their mobile devices or the internet. Therefore, BCE should be pretty resilient in this economic downturn.
The telecom is proud to have the largest 5G network in Canada. The faster mobile data speed can be enjoyed by its customers, who have 5G-capable smartphones, in Montréal, the Greater Toronto Area, Calgary, Edmonton, and Vancouver.
BCE Dividend Yield data by YCharts. BCE stock’s dividend yield history.
At $56.76 per share, BCE offers a yield of almost 5.9%. At close to a 6% yield, it’s a good place to start buying BCE stock for passive income. The big telecom currently pays a quarterly dividend that equates to an annualized payout of $3.33 per share.
Pembina Pipeline stock
Pembina Pipeline (TSX: PPL)(NYSE: PBA) is another interesting dividend stock for passive income. The energy infrastructure stock sold off with other energy stocks due to lower energy prices and demand. However, it’s a relatively safe investment compared to oil and gas producers.
Pembina has been doing a number of things to improve its financial position.
First, the company is deferring $0.9-$1.1 billion of expansion projects. Second, it decided not to increase its dividend a second time this year. (Recall that it increased its dividend by 5%, in January, after acquiring assets from Kinder Morgan.)
Third, the pipeline company is continuing its work on selling non-core assets, which could shore up $200-$500 million. Fourth, it’s always improving the efficiency of its operations. Recently, it achieved cost savings of $100 million a year.
At $33.41 per share, Pembina stock offers a yield of 7.5%. The monthly dividend makes it a convenient choice for passive income.
