The Motley Fool

Get a $144/Month Raise With 3 Dividend Stars

calculate and analyze stock
Image source: Getty Images

Creating multiple income sources is more than just about gaining access to additional funds; it’s also about security. With multiple income sources at your disposal, you have more leeway in case your primary income (a day job, for most people) is reduced or stopped. You might be able to take care of a few small expenses without relying solely on your savings/emergency funds.

Ironically, your savings (if they are still uninvested) can be used to start a passive-income source. Or you can take a different view and consider it a raise above your existing income, which can bridge the gap between your salary and your expenses. If you have a decent amount saved up, you can use $30,000 from it to start a $144-a-month passive income with three dividend stocks.

A metal processing and distribution company

Mississauga-based Russel Metals (TSX:RUS) is one of the largest metal processing and distribution companies in North America. It’s also one of the few stocks that is still riding the recovery momentum after the 2020 crash. The stock has grown almost 85% in the last 12 months, and it’s still quite fairly valued.

The company generates revenue from three different sources: metal service centres, energy products, and steel distributions. The service centres are responsible for about one-third of the revenues.

Russel Metals is currently offering a decent yield of 4.27% at a payout ratio of 45.6%, which is a massive step down from its 2021 payout ratio. At this yield, the company offers about $35.5 a month in dividend income.

A smart REIT

SmartCentres REIT (TSX:SRU.UN) stock has made great strides towards reaching its pre-pandemic valuation, but it’s still trading at a discount, although it has shrunk to single digits now. The stock is also quite fairly valued right now. It’s offering a juicy 6.11% yield at a payout ratio of 118%, which, even though it is in the dangerous territory, is significantly lower than its 2020 payout ratio.

If you invest $10,000 in the company, you can start a monthly passive income of about $51.

SmartCentres REIT has one of the largest portfolios of unenclosed shopping centres. The REIT develops and operates these properties and has an impressive tenant portfolio: 115 of its 168 properties are anchored by a Walmart. The REIT is also exploring several multifamily options under its Smart Living trademark.

A high-yield trust

If you are looking for a dividend stock in the real estate sector that grew its payouts instead of slashing it in 2020, Firm Capital Property Trust (TSXV:FCD.UN) should be on your radar. The trust is on its way to becoming an aristocrat and has already grown its payouts four times since 2017. Currently, it’s offering a mouthwatering yield of 6.99% at a stable payout ratio of 25.2%.

At this yield, the trust can offer you about $58 a month in passive income. And despite its strong growth since the pandemic-driven crash, the stock is relatively undervalued right now. The trust’s portfolio is made up of 72 commercial properties. It also has a stake in four apartment complexes and a manufactured housing community.

Foolish takeaway

The three stocks combined offer you a monthly dividend income of about $144.5 a month. That’s a sizeable enough raise on your regular monthly income to help you stave off any additional expenses you have to bear, thanks to the rising cost of living. And if you place these dividend stocks in your TFSA, this income will help you with expenses without offsetting your tax bill.

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. The Motley Fool recommends Smart REIT.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss an important event.

Iain Butler and the Stock Advisor Canada team only publish their new “buy alerts” twice a month, and only to an exclusively small group.

This is your chance to get in early on what could prove to be very special investment advice.

Enter your email address below to get started now, and join the other thousands of Canadians who have already signed up for their chance to get the market-beating advice from Stock Advisor Canada.