Want Passive Income? Bring In $1,000/Month No Matter What the Market Does

Should the market fall further, these are the three stocks I would recommend for Motley Fool investors to get strong passive income and a quick recovery.

| More on:

If you’re visiting the Motley Fool today, it’s likely because you’re looking at your investment portfolio and simply not liking what you see. I know I am. No one can predict when a recession or market correction will happen, but there certainly were a few red flags. And it’s leading many to consider passive-income stocks over growth.

What happened?

Let’s rewind to March 2020. That’s when the pandemic hit markets hard, causing the major downturn we all saw. Market bottom came on March 23, and then shares started climbing once more. Tech stocks, e-commerce companies, and anything related to getting through the pandemic all climbed sky high.

We just weren’t interested in passive income. We all stayed home with money to burn and wanted to make even more. So, we invested again and again, forgetting what we already know about keeping risk to a minimum.

Now, it’s caught up with us. Inflation rates have soared, hitting 8.3% last month in the United States, as we learned this week. This led to climbing interest rates — not to mention how expensive it is to buy gas. And this is all while we’re trying to start up our commute and get back to the office.

Meanwhile, needing cash on hand, many of us have started selling our stocks — some of us for a loss. And that hurts. But if you’re ready to get out of some of those riskier stocks that may not rebound fast after a downturn, then passive-income stocks are a strong option.

In fact, you could bring in $1,000 every month if you have enough to invest today.

The right stocks

What you want are companies that will recover quickly after a market downturn and offer high dividends. For that, I would recommend Bank of Montreal (TSX:BMO)(NYSE:BMO), Automotive Properties REIT (TSX:APR.UN) and Atrium Mortgage Investment (TSX:AI).

Each of these passive-income companies offer high dividends and are in strong industries that will survive the other side of a recession should it come to that. And let’s be clear: analysts believe it will, though it should be mild.

For BMO, the Big Six banks have credit loan losses to rely on should a market crash come. Meanwhile, it’s trading at 10.02 times earnings with a dividend yield of 4.04% as of writing.

For Automotive REIT, the company owns and acquires automotive dealerships across the country. Over the next decade, the introduction of electric vehicles will provide a lot of opportunities for this company. Yet today, you can pick it up trading at 6.05 times earnings with a dividend of 6.08% in passive income.

Finally, Atrium Mortgage provides mortgage financing as a lender to every type of real estate investment. That includes commercial and residential, but also infill construction and land assembly. In fact, it just announced record earnings for 2021, with an increase of 3.2% in its portfolio in the first quarter of 2022. And again, you can pick it up trading at 12.38 times earnings, with a 7.36% dividend yield.

Making $1,000

To make $1,000 per month in passive income, you would need to calculate $12,000 per year. So, that’s $4,000 coming from each stock. To do that, you would need to purchase 752 shares of BMO for $96,992, 5,000 shares of Automotive REIT for $66,000, and 4,444 shares of Atrium for $53,328.

That’s a big investment. And the market could still turn downwards. But these companies are also likely to rebound quickly. So, that means picking them up at a discount and looking forward to $12,000 per year in passive income while Motley Fool investors wait.

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 Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AUTOMOTIVE PROPERTIES REIT.

More on Dividend Stocks

Canadian flag
Dividend Stocks

1 Magnificent Canadian Dividend Stock Down 8% to Hold for Decades

Do you want some dividends with those returns? Then buy this stock while it's down.

Read more »

calculate and analyze stock
Dividend Stocks

2 Stocks That Cut You a Cheque Each Month

These two top Canadian monthly dividend stocks could help you generate reliable passive income for years to come.

Read more »

engineer at wind farm
Dividend Stocks

Fortis Stock: Buy, Sell, or Hold in 2025?

With Fortis now trading just off its 52-week high, is it still one of the best Canadian stocks to buy…

Read more »

RRSP Canadian Registered Retirement Savings Plan concept
Dividend Stocks

The 3 Best Canadian Stocks to Buy Now and Hold Forever in an RRSP

There's a lot to consider when eyeing up some long-term holds in an RRSP, so let's get into it.

Read more »

Canadian dollars are printed
Dividend Stocks

1 Superior Canadian Dividend Stock Down 7% to Buy in Bulk

Just because stocks are down doesn't mean you should ignore them. This one, you should buy up in bulk.

Read more »

Technology
Dividend Stocks

TFSA Investors: 3 Dividend Stocks for Worry-Free Passive Income

These three stocks all offer attractive and consistently growing dividends, making them ideal passive-income generators for your TFSA.

Read more »

rail train
Dividend Stocks

Outlook for Canadian National Railway Stock in 2025

Other than a safe dividend yield of 2.4%, the blue-chip stock also offers solid long-term returns potential at current levels.

Read more »

doctor uses telehealth
Dividend Stocks

This 7% Dividend Stock Pays Cash Every Month

Looking for passive income during this trying time? Consider this dividend stock for ultimate income.

Read more »