The TSX today remains one filled with volatility. Even after a market correction of 10.8% hit between March 29 and mid-May, shares still fluctuate up and down. But now is a great time to buy passive-income stocks on the cheap to create stable cash flow.
In fact, many of these companies continue to pay out high dividends thanks to long-term contracts. So, let’s look at two passive-income stocks to consider right now on the TSX today.
Brookfield Renewable
Brookfield Renewable Partners (TSX: BEP.UN)(NYSE: BEP) has consistently paid out dividends to its investors for the last several years. In fact, it’s increased its dividend for the last 13 consecutive years. In the meantime, it’s paid out that dividend on a regular basis for about 20 years since coming on the market.
The company has a diverse set of revenue streams within the clean energy sector — a sector that will likely be booming over the next decade. It has long-term contracts signed on and is looking for even more all the time thanks to its cash on hand.
This helps Brookfield support dividend payments and increases and could lead to substantial ones in the near future. Yet right now, it’s going through a pullback because of the inflation and supply-chain demand issues that continue to put pressure on the industry.
Still, right now, you can pick up the company with a 3.52% dividend yield — a dividend that’s increased at a compound annual growth rate (CAGR) of 7.76%.
Slate Grocery REIT
Real estate investment trusts (REIT) are strong investments for passive income for a number of reasons, but the biggest one is stability. If you find the right REIT, you can look forward to decades of passive income thanks to lease agreements coupled with rental collection.
A prime target is Slate Grocery REIT (TSX: SGR.U). The grocery-anchored company operates primarily in the United States. This means it’s tied to essential services that continued to bring in income, even during the height of pandemic restrictions.
Now that those restrictions have eased off, the company is bringing in even more revenue. Furthermore, lower interest rates meant the company saw a renewal of lease agreements. Total occupancy remained stable at 93.2% during the last quarter, with 97% of its properties protected by long-term lease agreements. That offers protection during this inflationary market.
Right now, you can pick up the passive-income stock with an incredible 7.58% dividend yield. That dividend has risen by a CAGR of 0.67% over the last five years coming out on a monthly basis.
Bottom line
Both Brookfield and Slate offer solid long-term income as passive-income stocks. Furthermore, they have solid cash flow that can see Canadians bring in cash for decades, as they’re attached to agreements lasting over a decade in many cases.
If you were to use your Tax-Free Savings Account to put half of the $81,500 contribution room towards each stock, you could bring in passive income of $4,482 annually, or $373 per month!
