Passive-Income Investing: How to Generate $15/Day TAX FREE in 2022

Canadians looking to build a passive-income portfolio should consider stocks like Freehold Royalties Ltd. (TSX:FRU) in their TFSA.

Back in March 2019, I’d discussed strategies investors could pursue in a Tax-Free Savings Account (TFSA). Today, I want to explore how to make the most of out a TFSA with a portfolio geared towards generating passive income. In this hypothetical, we will be utilizing all our cumulative contribution room — $81,500. Let’s jump in.

Here’s an undervalued stock that can churn out big dividends

First National (TSX: FN) is a Toronto-based company that originates, underwrites, and services commercial and residential mortgages in Canada. Shares of this housing-linked stock have dropped 5.3% in 2022 as of close on April 20. The stock has plunged 19% from the previous year.

In 2021, net income was reported at $10.4 million, or $1.86 per diluted share — up from $8.9 million, or $1.82 per diluted share, in 2020. Shares of First National closed at $40.36 per share on April 20. In our hypothetical, we’ll snatch up 500 shares of First National for a purchase price of $20,180. This stock last paid out a monthly distribution of $0.196 per share, representing a strong 5.8% yield. This will allow us to generate daily passive income of $3.22.

Passive-income investors may want to target this monster REIT

True North REIT (TSX: TNT.UN) is a real estate investment true (REIT) that focuses on office properties across a variety of sectors. Its shares have dropped 4.3% so far in 2022. The stock has been mostly flat in the year-over-year period.

This REIT reported revenues and net operating income (NOI) that were mostly flat from the previous year. True North REIT closed at $7.12 per share on April 20. We can snag 2,880 shares of this REIT for a total purchase price of $20,505.60. This REIT currently offers a monthly dividend of $0.05 per share. That represents a monster 8.3% yield. Passive-income investors will be able to churn out $4.73 daily in their TFSA.

This energy stock is designed to deliver consistent passive income for the long haul

Freehold Royalties (TSX: FRU) is an oil and gas royalty companies that is committed to rewarding its shareholders. It owns working interests in oil, natural gas, natural gas liquids (NGLs), and potash properties in North America. Shares of this energy stock have climbed 31% in 2022 as of close on April 20.

In the fourth quarter of 2021, Freehold Royalties saw its funds from operations hit a 25-year high of $68.8 million, or $0.46 per share. This stock closed at $15.90 per share on April 20. We can grab 1,285 shares of Freehold for a total price of $20,431.50.

Freehold hiked its monthly dividend to $0.08 per share in its most recent quarterly report. That reflects a tasty 6% yield. We can now generate daily passive income of $3.37 in our TFSA going forward.

One more dividend stock to add to your portfolio today

Keg Royalties (TSX: KEG.UN) is the fourth and final dividend stock we’re going to target in our TFSA for passive income. This Vancouver-based income fund offers royalties from the Keg restaurants. Its shares have increased 9.4% so far this year.

This income fund closed at $15.98 per share on April 20. We can snatch up 1,250 shares of Keg Royalties for a purchase price of $19,975. It last paid out a monthly dividend of $0.095 per share, which represents a huge 7.1% yield. This will allow us to churn out passive income of $3.90/day in a TFSA.

Conclusion

These stock purchases will allow us to churn out total daily passive income of $15/day in our TFSA. That is a nice supplement for our portfolios in an uncertain economic environment.

Fool contributor Ambrose O'Callaghan has no position in any of the stocks mentioned. The Motley Fool recommends FREEHOLD ROYALTIES LTD.

More on Investing

Investor reading the newspaper
Stocks for Beginners

Steel is Back in the Headlines: This Iron Ore Royalty Pays You to Watch

Labrador Iron Ore Royalty offers a variable dividend, with mine recovery carrying more weight than steel-policy headlines.

Read more »

TFSA (Tax-Free Savings Account) on wooden blocks and Canadian one hundred dollar bills.
Dividend Stocks

Your TFSA Contribution Room May Be Bigger Than You Think

If you've owned Shopify (TSX:SHOP) stock in a TFSA and withdrawn a big portion of your gain, you might be…

Read more »

A shopper makes purchases from an online store.
Tech Stocks

What Investors Need to Know About Owning U.S. Stocks in a TFSA

Do you own U.S. stocks in a TFSA? Learn how the 15% dividend withholding tax works, why Amazon pays none,…

Read more »

man shops at grocery store
Stocks for Beginners

What $10,000 in Dollarama Became in 10 Years

A nearly 10-year Dollarama holding grew to roughly $58,000 before dividends, while today's valuation raises a different question.

Read more »

tsx today
Stock Market

TSX Today: Why Canadian Stocks Could Fall on Thursday, October 22

After reaching its highest closing level in four weeks, the TSX faces a challenging session today as investors weigh plunging…

Read more »

woman relaxes with phone
Dividend Stocks

Telus Dividend Reliability: Is the Telecom Still Worth Holding?

Telus (TSX:T) stock might be a falling knife, but the shares still look like a dividend deal going into November…

Read more »

Utility, wind power
Dividend Stocks

I Keep Coming Back to This 5.6% Dividend Stock

Brookfield Renewable offers a 5.6% yield and targets 10%+ FFO growth. Here is what management said, plus risks every Canadian…

Read more »

concept of real estate evaluation
Dividend Stocks

A Tailor-Made TFSA Stock: An 8.3% Yield With Monthly Paycheques

A non-bank lender paying monthly dividends, including year-end special dividends, is tailor-made for a TFSA.

Read more »