Want a Quick Boost in Income? Bring Home 2 Cash Cows

Investing in cash cows can give you a quick boost in income. The NorthWest Healthcare stock and True North Commercial stock are excellent dividend plays for their ultra-high yields.

| More on:
money cash dividends

Image source: Getty Images

Children place extra coins in their piggy banks to save money. But for older people or working individuals, saving and investing are the ways to make money or build wealth for the future. Most investors prefer stocks over other assets because potential returns are higher. However, for income investors, dividends are more important than capital gains.

Dividend stocks deliver constant, recurring cash flows. Fortunately for Canadians, they can boost their income further with real estate investment trusts (REITs). NorthWest Healthcare Properties (TSX:NWH.UN) and True North Commercial (TSX:TNT.UN) are cash cows on the TSX. The two REITs boast stable property rental businesses and pay ultra-high dividends.

Top choice in the pandemic

NorthWest became a popular investment choice during the health crisis. The $2.82 billion REIT owns and operates real estate healthcare infrastructure such as hospitals, clinics, and medical office buildings. It’s also the only REIT in the cure sector. Furthermore, NorthWest is the leading healthcare REIT globally.

The share price ($13.10) is within reach, and the dividend yield is a fantastic 6.13%. Assuming you buy $6,000 worth of shares to place in your Tax-Free Savings Account (TFSA), the tax-free income is $367.80. Your TFSA balance should grow faster as you add more shares and maximize your investment account every year.

In Q2 2021, NorthWest’s 190 income-producing properties delivered a net income of $81 million, or 125% higher than in Q2 2020. While the occupancy rate fell slightly to 96.7%, funds from operations increased 25% to $42.3 million. The REIT acknowledges that the focus on the global healthcare industry remains intense.

Apart from growing its global asset management platform, NorthWest continues to drive value-add opportunities. With the weighted average lease expiry at 14.2 years, investors can expect uninterrupted income streams.

Solid tenant base

True North Commercial is an excellent dividend play. The key takeaways for this $661.64 million REIT are the long-term leases with government and credit-rated tenants. This REIT is relatively small but is more stable than most REITs. The federal government of Canada and three provincial governments are anchor tenants in some of its 45 office properties.

NorthWest’s tenant profile makes it an attractive investment option. The federal government of Canada accounts for 14.2% of gross revenue with a remaining lease term of 6.3 years. Overall, the weighted average lease expiry is 4.9 years. Staples Canada ULC has the most extended lease term at 12.3 years.

In the first half of 2021, the occupancy rate of 97% is the same as a year ago. However, NorthWest experienced an identical 1% dip in revenue and net operating income. The plan throughout this year is to continue investing capital in its properties.

Meanwhile, management expects investment activities to remain limited and lower than historical levels due to the COVID-19 pandemic. For prospective investors, True North’s share price is $7.54, while the dividend yield is 7.88%. Given the very high yield, any investment account will double in nine years.

Boost your income instantly

Cash cows NorthWest Healthcare and True North Commercial can instantly boost your income. Both pay high dividends and are not mediocre stocks. Their share prices have held steady since the onset of the pandemic until today. Finally, the rental businesses should also remain stable for years.

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 Christopher Liew has no position in any of the stocks mentioned. The Motley Fool recommends NORTHWEST HEALTHCARE PPTYS REIT UNITS.

More on Dividend Stocks

Pile of Canadian dollar bills in various denominations
Dividend Stocks

Ready to Invest With $5,000? 3 Stocks for July 2024

Are you ready to invest in stocks that can provide growth and income for decades? Here are three options for…

Read more »

Double exposure of a businessman and stairs - Business Success Concept
Dividend Stocks

Here’s the Average TFSA Balance at Age 41 in Canada

The average TFSA balance at age 41 is lower than the cumulative contribution room, but it’s never too late to…

Read more »

money cash dividends
Dividend Stocks

2 Top TSX Dividend Stocks to Own for Passive Income

These great Canadian dividend stocks now offer high yields.

Read more »

Dividend Stocks

2 Dividend Stocks That Could Create $1,000 in Passive Income in 2024

Are you building your passive-income portfolio? Invest $10,000 and get a $1,000 annual payout in 12 monthly installments starting August…

Read more »

Payday ringed on a calendar
Dividend Stocks

How to Use a TFSA to Earn $250 Per Month in Tax-Free Passive Income

TFSA investors can consider holding dividend stocks such as Mullen Group in the registered account for passive income.

Read more »

Blocks conceptualizing Canada's Tax Free Savings Account
Dividend Stocks

TFSA Passive Income: 2 Stocks to Buy and Never Sell

A TFSA portfolio built with solid dividend stocks that promise decades of stable payouts can be an indispensable passive-income source.

Read more »

Family relationship with bond and care
Dividend Stocks

Invest in These TSX Stocks Now and Retire With Peace of Mind

Canadian stocks like Brookfield Asset Management (TSX:BAM) offer long term investment potential.

Read more »

The TFSA is a powerful savings vehicle for Canadians who are saving for retirement.
Dividend Stocks

TFSA Passive Income: 4 Stocks to Buy and Never Sell

These four TSX dividend stocks could boost your passive income.

Read more »