TFSA Investors: 1 Passive-Income Stock for $7,551 Per Year!

NorthWest Healthcare (TSX:NWH.UN) stock could be the best passive-income stock out there to bring in $7,551 in income this year.

Amy Legate-Wolfe

Author Bio

Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Her work can also be found at Canada's National Observer, where she writes on the business side of climate action. Before joining Motley Fool Canada, Amy wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband.

Social Media

Follow Amy on LinkedIn and Canada Stock Digest.

Favorite Investment Quote

“October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published June 7, 2022 12:45 pm EDT

| More on: VITL.UN

Passive-income stocks are still one of the top choices for Motley Fool investors on the TSX today. But if you want value and growth along with your dividends, then today, we’re going to focus on one passive-income stock to get you there.

NorthWest Healthcare

NorthWest Healthcare Properties REIT (TSX:NWH.UN) is a strong real estate investment trust (REIT) that saw substantial growth over the last few years. The healthcare REIT acquires any type of building that’s connected to the healthcare industry. These properties also include purchasing REITs as well, which the company did last year when buying up an Australian healthcare REIT.

NorthWest is a strong passive-income stock because of this diversified portfolio, which now includes properties in the United States. Growth has been going strong as well, thanks to an increase in privatized healthcare the company is getting in on.

And I’d be loath to forget the affects from the pandemic. Interest rates were low and healthcare use was up. This led to an increase in lease agreements, with the company now boasting a 14.6 global lease agreement and high occupancy rates.

Passive income

All this is to say that NorthWest is a strong, supported passive-income stock that can afford to keep dishing out payouts. Investors can currently lock in a dividend yield of 6.21%. That amounts to $0.80 per share on an annual basis.

While that doesn’t look like much, take a look at NorthWest stock, and you’ll see the company also offers a share price of just $12.87. That means you’re bringing in substantial dividends compared to its cheap share price.

Furthermore, the company trades in value territory at just 6.06 times earnings. Analysts also project it could reach a share price of $15.31 in the next year. That would create a potential upside of 19% as of writing.

Creating passive income

If you want to create a strong line of passive income for your Tax-Free Savings Account (TFSA), NorthWest is one of the best ways to do it. Motley Fool investors can lock in that rate within value territory and start bringing in dividends each and every month.

Let’s say you were to use $30,000 to invest in NorthWest today. That would bring in $1,864 each and every year! Coming out monthly, that’s an additional $155 per month to look forward to.

But it gets even better. Let’s say you see your shares rise to that potential upside suggested by analysts. That would mean your $30,000 investment would turn into $35,687! That’s a return of $5,687. On top of that, you have your $1,864, of course. Together, that’s total returns of $7,551 from just one year of investment.

Bottom line

If you want a strong passive-income stock, NorthWest stock is one to bring in long-term, substantial funds. While the company hasn’t grown its dividend in a long time, it hasn’t shrunk either. This provides you with a stable method of income just like a paycheque. All while seeing your returns rise higher and higher from the company’s stable business operation.