Passive Income: Earn $9.4/Day Without Lifting a Finger

Relatively few assets/investments come even close to dividend stocks when it comes to the “passiveness” of a passive-income source.

| More on:
Simple life style relaxation with Asian working business woman healthy lifestyle take it easy resting in comfort hotel or home living room having free time with peace of mind and self health balance

Image source: Getty Images

There are numerous ways of starting a passive income, each with its own return potential and time, energy, and financial commitment. But if you are looking for a passive income that doesn’t require you to do anything, dividend stocks are your best bet. With enough capital, the right stocks can help you earn over $9 a day, which might at least cover your daily coffee budget.

A financial stock

As one of the largest sectors on the TSX and home to many stable, blue-chip companies, Canada’s financial sector offers a comprehensive collection of dividend stocks. One of them is IGM Financial (TSX:IGM), a leading wealth and asset management company in the country with a globally diverse clientele and a market capitalization of about $11.1 billion.

But the number you might be more interested in would be its dividend yield, which is currently 4.74%. The number, while powerful enough, is quite low compared to what it was last year during the pandemic-driven crash. The stock has grown over 114% since then, bringing down the yield to more realistic levels. If you invest $20,000 in the company now, you can enjoy a daily income of about $2.6.

An energy stock

The energy sector has been on the rise for a while now — a trend that has accelerated the recovery/growth of stocks like Pembina Pipeline (TSX:PPL)(NYSE:PBA). The stock has grown almost 45% in the last 12 months, and, consequently, the yield has stepped just below 6% (it’s 5.99% for now). It’s still enough to get you about $100 a month or about $3.3 per day. The payout ratio is a bit high right now, but the company has maintained its dividends through worse.

Pembina Pipeline, with its market capitalization of about $23.1 billion, is counted among the big players of the pipeline industry segment within the energy sector. The company has been around for over six-and-a-half decades and focuses on the transportation of hydrocarbon liquids and natural gas, primarily in Western Canada.

A food products stock

Rogers Sugar (TSX:RSI), even though it’s a small stock compared to the other two on this list (with a market capitalization of $579 million), is a more generous dividend stock when it comes to yield and has more of a well-defined competitive edge in its industry than the other two. It’s the largest producer of refined sugar in the country, catering to both B2C and B2B customers.

The company is currently offering a mouthwatering yield of 6.44%, at a safe payout ratio of about 87.8%. The yield is enough to get you about $3.5 a day with $20,000 invested in it. It’s also a relatively attractive buy from a valuation perspective, but if you are expecting any appreciable capital growth prospects, you might be disappointed.

Foolish takeaway

If you invest a capital of $60,000 in the three dividend stocks, you will get about $9.4 a day in dividend income. That might not seem much, but that’s money coming into your bank account without you lifting a single finger. And all three companies recently passed a stress test of the pandemic since none slashed their dividends.

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 PEMBINA PIPELINE CORPORATION.

More on Dividend Stocks

Arrowings ascending on a chalkboard
Dividend Stocks

The 5.5% Dividend Stock Set to Dominate the TSX

TD Bank (TSX:TD) stock looks severely undervalued while the yield is around 5.5%.

Read more »

protect, safe, trust
Dividend Stocks

Passive Income: How to Earn Safe Dividends With Just $10,000

These three dividend stocks with resilient business models and a growing earnings base can provide durable passive income.

Read more »

Printing canadian dollar bills on a print machine
Dividend Stocks

How to Use Your TFSA to Earn $34,150 Per Year in Tax-Free Income

Canadian investors can hold undervalued TSX dividend stocks in a TFSA and benefit from outsized gains 2024 and beyond.

Read more »

Target. Stand out from the crowd
Dividend Stocks

3 Monthly-Paying Dividend Stocks That Are Screaming Buys Right Now

These three monthly-paying dividend stocks are excellent additions to your portfolios.

Read more »

Growing plant shoots on coins
Dividend Stocks

TFSA Set and Forget: 1 Dividend-Growth Superstar for the Long Run

Manulife Financial (TSX:MFC) stock is in the zone, with dividend hikes and big buybacks likely in the cards.

Read more »

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

For a Shot at $6,228/Year in Passive Income, Buy 755 Shares of This TSX Stock

Looking for passive income? You'll need to look beyond only dividends. Which is why EIF stock could be one of…

Read more »

Piggy bank with word TFSA for tax-free savings accounts.
Dividend Stocks

TFSA Investors: 2 Dividend Stocks I’d Buy and Hold Forever

These two stocks could provide long-term investors multi-year returns of more or less 10% per year

Read more »

crypto, chart, stocks
Dividend Stocks

Why Waste Connections Stock Keeps Going Up

Waste Connections stock (TSX:WCN) continues to hit all-time highs. But is more on the way, or is an investment wasteful?

Read more »