Passive Income in Canada: How to Easily Earn $7.99/Day

Earning nearly $8 passive income daily is possible if you can accumulate shares of generous dividend-paying companies.

| More on:
stock data

Image source: Getty Images

Earning passive income is a breeze these days, but only if you have the funds or free cash to invest in the stock market. Some people think you need substantial seed capital to start dividend investing. You can always start small then slowly accumulate shares as you go along.

The TSX is home to generous income-producing assets. A formidable combination is a royalty stock and a real estate investment trust (REIT). The average dividend yield is 5.755%, so if you have a $25,000 position in each stock, you can easily earn $239.79 per month, or $7.99 per day.

Another important tip is that both stocks are eligible investments in a Tax-Free Savings Account (TFSA) and Registered Retirement Savings Plan (RRSP). Use your available contribution limits in either investment account for tax-free money growth.

High-flying royalty stock

Very seldom will you see a high-flying royalty stock on the TSX. However, Freehold Royalties (TSX:FRU) in the energy sector had a total return of 134.41% in 2021. As of January 19, 2022, the share price is $12.59 (+8.07%), while the dividend yield is 5.67%.

The $1.73 billion company isn’t an oil producer but an oil and gas royalty company with working interests in oil, natural gas, and potash properties in Western Canada and the United States. Freehold’s primary focus is to provide investors with lower-risk returns and growth over the long term.

Freehold has high-netback portfolio of mineral titles and royalties on oil and gas properties across North America. According to management, quality assets translate to sustainable dividends. Investors should note that the royalty stock has raised its dividends five times since late 2020.

Usually, dividend increases reflect higher commodity prices, increased capital spending on royalty lands, and enhancements in the acquired properties, according to management. Freehold is extremely happy that its top payors in Canada and the U.S. continue to promote progressive ESG strategies through all facets to improve its ESG portfolio.

In Canada, Freehold’s top operators are Canadian Natural Resources, Crescent Point, Whitecap, Tourmaline, and Tamarack Valley Energy. The first three are leaders in carbon-capture development and sequestration projects.

REIT at centre stage

The global pandemic pushed NorthWest Healthcare Properties (TSX:NWH.UN) to centre stage. This $2.96 billion firm is the only REIT in the cure sector. It owns and operates healthcare real estate infrastructure like hospitals, clinics, and medical office buildings.

NorthWest wasn’t a high flyer in 2021 like FreeHold Royalties, although it was steady performer (16.54% total return). If you invest today, the share price is $13.59, while the dividend yield is a lucrative 5.84%. Management has yet to report the full-year 2021 results, although it was already pleased with the solid operating results after three quarters.

At the end of Q3 2021, portfolio occupancy was 96.9% and the weighted average lease expiry is 14,1 years. For the international portfolio, the figures are 98.5% (occupancy rate) and 17.2 years (lease expiry). Management is confident that NorthWest remains well positioned to execute its strategic priorities in 2022. The focus is on growth and balance sheet optimization.

Earn with minimal effort

Canadians can save and invest to earn passive income with minimal effort. The key is to pick generous and reliable income providers.

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 CDN NATURAL RES, FREEHOLD ROYALTIES LTD., and NORTHWEST HEALTHCARE PPTYS REIT UNITS.

More on Dividend Stocks

data analyze research
Dividend Stocks

The 3 Most Traded Stocks on the TSX

These three most traded TSX stocks might give you an idea of where big investors’ money has been flowing lately.

Read more »

Payday ringed on a calendar
Dividend Stocks

Earn a Monthly Income of $260 From These 3 REITs

REITs are ideal for creating a monthly passive-income stream, because they have the right distribution frequency and usually offer healthy…

Read more »

Upwards momentum
Dividend Stocks

TFSA Passive-Income Alert: 2 Cheap Stocks With High Yields and Growing Dividends

These top TSX dividend stocks look attractive right no for a TFSA focused on passive income.

Read more »

Hands holding trophy cup on sky background
Dividend Stocks

The 3 Best Dividend Stocks to Buy Before June 2022

The recent market correction has created some great opportunities to pick up top-quality dividend stocks. Here are three to buy…

Read more »

Businessperson's Hand Putting Coin In Piggybank
Dividend Stocks

Retirees: 3 Stocks to Stash for Your Retirement

Canadian can ensure financial stability in the sunset years by forming a formidable portfolio of retirement wealth builders.

Read more »

calculate and analyze stock
Dividend Stocks

Down by 27%: Should You Buy Magna International (TSX:MG) Stock Today?

This top auto parts maker stock is down by a considerable margin, and it could make for a good value…

Read more »

Money growing in soil , Business success concept.
Dividend Stocks

Top Canadian Dividend Stocks to Buy and Hold for the Long Term

These Canadian companies have been paying dividends for more than four decades and have been consistently growing the same.

Read more »

edit Safety First illustration
Dividend Stocks

How to Generate Inflation-Proof Passive Income

Inflation-resistant, passive-income stocks like Enbridge (TSX:ENB)(NYSE:ENB) should be on your list.

Read more »