Top 3 Passive-Income Stocks to Buy Now

Passive-income stocks like Enbridge (TSX:ENB)(NYSE:ENB) should be on your radar.

| More on:
money cash dividends

Image source: Getty Images

If you’ve been lucky enough to accumulate wealth over the course of this recent bull run, it might be time to set some money aside in safer, more passive investments. 

Some sectors of the economy are inexplicably undervalued. That means stocks are trading at low multiples and throwing off high dividend yields. These could be the perfect targets for passive-income seekers. Here are the top three opportunities that should be on your radar. 

Passive-income opportunity #1

Enbridge (TSX:ENB)(NYSE:ENB) is an obvious candidate for passive-income seekers. The energy infrastructure giant has been underestimated by investors for roughly half a decade, ever since the oil market crashed. Now, we’re in a very different environment. Oil prices are steadily rising, and we could even face a supply crunch this winter. 

In fact, some experts suggest the cost of a barrel could reach US$100 within just a few months. That’s because renewable energy sources have struggled to keep up with a sharp rebound in consumer demand.

Higher oil prices could be the perfect catalyst for Enbridge stock. It’s currently trading at a price-to-earnings ratio of 16.9 and offers a 6.6% dividend yield. Meanwhile, the management team believes dividends could be even more generous in the future. Distributable cash flow (DCF) is expected to grow between 5% and 7% annually until 2023. 

This combination of steady growth and low valuation is rare right now. That’s what makes Enbridge such a compelling passive-income opportunity. 

Passive-income opportunity #2

NorthWest Healthcare Properties (TSX:NWH.UN) is yet another excellent passive-income opportunity. It’s also, arguably, the most stable stock on this list. That’s because its underlying assets are specialized properties that service medical companies. Clinics and hospitals sign multi-year leases (14 years on average) and generate earnings that have no connection to the economic cycle. 

In other words, NorthWest is one of the most secure landlords in the country. Meanwhile, its underlying real estate serves as an inflation-hedge in months ahead. This is why it’s surprising that this stock is still so overlooked. It’s trading at a price-to-earnings ratio of 9.3 and offers a dividend yield of 5.9%. That’s a bargain!

Passive-income opportunity #3

Fiera Capital (TSX:FSZ) is the final passive-income opportunity on this list. It’s also the most unique. Unlike Enbridge and NorthWest, Fiera doesn’t own tangible assets. Instead, it owns a portfolio of preferred stock from small- and mid-sized companies across North America. 

The company likes to focus on profitable, family-controlled businesses that are seeking growth capital but don’t want dilution or debt. The team offers these entrepreneurs cash in exchange for a small stake that has a built-in dividend yield — usually around 15%. 

That’s how the company can manage to offer public investors a dividend yield of 7.95%. It’s one of the most lucrative dividend stocks on the market right now, and that’s why it deserves a spot on your watch list. 

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 Vishesh Raisinghani has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Enbridge. The Motley Fool recommends NORTHWEST HEALTHCARE PPTYS REIT UNITS.

More on Investing

grow dividends
Dividend Stocks

These 3 Stocks Could Grow (at Least 5X) in the Next Decade if They Repeat History

Three stocks could soar by least five times more if they repeat history with the return of a bull market.

Read more »

analyze data

Brookfield Stock: Deep Value Hiding in Plain Sight as Shares Sink to 52-Week Lows

Brookfield Corp. (TSX:BN) stock seems like a great buy versus Brookfield Asset Management (TSX:BAM) for TSX value investors.

Read more »

Illustration of bull and bear

3 Stocks to Buy if You Think There’s a Bull Market Coming

Are you anticipating a bull market? Here are three stocks to buy!

Read more »

online shopping
Tech Stocks

Is Shopify Stock a Buy in March?

Shopify stock has had a volatile run, but fundamentals are strong, and valuations are much lower after its 71% decline.

Read more »

data analyze research
Tech Stocks

2 Top Stocks to Buy in March 2023

Given their solid financials and high-growth prospects, these two stocks are excellent buys right now.

Read more »

work from home
Dividend Stocks

3 Stocks to Hold for the Next 20 Years

Are you looking for some stocks to hold for 20 years or more? Here are three great options to consider…

Read more »

little girl in pilot costume playing and dreaming of flying over the sky
Dividend Stocks

3 Stocks You’ll Probably Be Able to Pass On to Your Grandkids

Three stocks are ideal holdings for generational wealth builders who will eventually pass these assets to the next generation or…

Read more »

Dividend Stocks

SmartCentres: Is Your Dividend at This REIT Safe?

The interest rate hike has pulled down property prices. Should you be worried about your monthly passive income from this…

Read more »