Everyone could use some extra cash right now. In fact, everyone across Canada could use more than just some extra cash. We need nest eggs. We need emergency funds. We need as much as we can bring in. When it comes to investing, that means we need dividend stocks.
While the markets certainly have a lot of opportunities out there, it’s still a volatile market. You could potentially make a lot of money in a short period of time from some stocks. But that’s risky. Not all stocks are created equal. Some will soar, some will indeed sink. So stable dividend stocks are your best bet for bringing in cash.
But that’s a whole other problem on its own. What stocks will continue to bring in stable dividends? During this economic downturn, that will likely last years along with the pandemic, companies could go under. At the least, many companies will see revenue cut down to nothing. That will mean dividends will be the first to go.
Find the industry
What investors need to do is look at industries set to continue rising even during this downturn. I know, easier said than done, but it’s fairly easy to identify. Take the healthcare industry. There are plenty of healthcare companies doing quite well, but even those companies that create hospital equipment, for example, could go on lockdown during the pandemic.
That’s why real estate investment trusts are one of the perfect places to look, especially within the healthcare industry. Real estate investment trusts must dish out 90% of taxable income to shareholders, usually as dividends. So that’s already a bonus. But within the healthcare industry, these are just properties. Healthcare properties like hospitals that aren’t going anywhere any time soon.
Find the stock
A perfect stock to take advantage of all of this has to be NorthWest Healthcare Properties REIT (TSX:NWH.UN). NorthWest has an international, diversified portfolio of 189 income-producing properties located in Canada, Brazil, Europe, Australia and New Zealand. It includes medical office buildings, clinics, and hospitals. Each is then attached to long-term leases with stable occupancy.
In fact, while other REITs have seen revenue shrink, Northwest has seen its revenue jump. Before the pandemic, revenue grew year-over-year by just 1%. During the last two quarters, revenue soared to 10.8% year over year. Shares have also gone up by 100% in the last five years, with a five-year compound annual growth rate (CAGR) of 14.89%.
Now for the dividend. The company currently offers a 6.87% dividend yield for investors. In the last five years, that dividend has grown at a CAGR of 6.3%. And the best news? The dividend is given out monthly. So now, if you and your partner want to bring in passive income of $400 per month, all you have to do is combine your Tax-Free Savings Account. Between the two of you, you’ll have $139,000 of contribution room. So if you take $70,000 of that room, you can bring in $400 in passive income each and every month!
You should always create a diverse portfolio, so make sure to use the rest of that room for something else. But buying up a dividend stock like NorthWest is the perfect way to bring in steady passive income right now. Don’t wait around for a benefit: Use this company to bring in stable passive income for years to come!
You can bring in even more cash each month with a stock like this!
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Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends NORTHWEST HEALTHCARE PPTYS REIT UNITS.