Finding the right mix of investments that can generate a superb passive-income flow takes time and patience. Fortunately, the market provides plenty of options to consider. Here are three great passive-income stocks to add to your portfolio.
Would you like a defensive stock with a 5% yield?
When it comes to adding a defensive stock to your portfolio, Canada’s telecoms are always welcome additions. BCE (TSX:BCE)(NYSE:BCE) in particular is a stellar choice for investors to consider.
Apart from boasting a juicy 5.41% yield, BCE is wrapped in a defensive package for investors. Telecoms operate a very defensive business, and that moat has only grown since the pandemic began.
Many office workers have transitioned into full-time remote staff. And schools may have reopened for in-person learning, but remote-learning options are likely here to stay. This means that a fast, stable internet connection is no longer seen as a luxury. It’s a necessity for our new connected normal.
The same could be said of wireless data. During the pandemic, we shifted more towards online commerce in lieu of in-person shopping. To be fair, that shift was already happening pre-COVID, but the pandemic just accelerated it.
Turning back to income, let’s answer one final question. Just how much income can you earn from BCE? A $30,000 investment will provide just over $1,600 income in the first year. That’s reason enough to put BCE on your list of great passive-income stocks.
More than dirty oil and pipelines
Enbridge (TSX:ENB)(NYSE:ENB) is the energy behemoth that needs no introduction. The company is primarily known for its massive pipeline network. That extensive pipeline generates revenue in a passive manner, not unlike a toll-road network.
What most investors may not realize, however, is that Enbridge also has an impressive and growing renewable energy arm. That renewable energy segment boasts a global portfolio of assets that encompasses primarily wind and solar units.
Perhaps best of all is Enbridge’s tasty quarterly dividend. The current yield works out to a yield of 6.64%. This means that a $30,000 investment will earn just shy of $2,000 in income in the first year.
Banking in growth and income
You can’t put together a list of stellar passive-income stocks without mentioning at least one of Canada’s big banks. Today, that bank is Canadian Imperial Bank of Commerce (TSX:CM)(NYSE:CM).
So, what makes CIBC one of the good, if not superb, passive-income stocks to add to your portfolio? That comes down to a few key points.
CIBC is a well-diversified option to consider. Apart from its strong domestic network, CIBC boasts an impressive and growing presence in the U.S. market. This offsets much of the risk often associated with the Canadian real estate market and provides an avenue for growth.
Then we have CIBC’s quarterly dividend. The current 3.97% yield is impressive on its own, but investors should be ready for a massive hike. Dividend hikes are common among Canada’s banks but have been frozen since the pandemic hit. That moratorium on hikes and share buybacks was lifted earlier this month. Investors can expect a double-digit hike later this month when the next set of financials are reported.
Currently, that yield will provide approximately $1,200 income during the first year of a $30,000 investment. Again, investors can expect that final number to come in significantly higher next year.
Will you buy any of these superb passive-income stocks?
The three stocks noted above are well-diversified options that, individually, could do well in almost any portfolio. Add all of them and you have a three-stock portfolio ready for long-term growth and income-earning potential.
Buy them, hold them, and let these passive-income stocks line your portfolio.
