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.

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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.


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.

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

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