Earn Passive Income of $718/Month the Uncomplicated Way

There are a lot of healthy dividend stocks with decent yields and stable payouts that can be used to generate a reliable, long-term passive income.

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There are plenty of complicated ways to start a passive income. You have your time- and energy-consuming ways like freelancing or taking on side gigs. Then there is the more common, resource-intensive passive income source of becoming a landlord.

You can also create a passive-income stream by trading, which may not require as much capital as real estate, but the risk of losing it all (or most) is significantly higher.

On the other end of the spectrum, there are the least-complicated ways of starting a passive-income stream, the most popular of which is investing in dividend stocks. And if you have a sizeable enough sum to invest, say, $150,000, you can start a healthy passive income with the right dividend stocks.

An alcohol manufacturing and distribution company

While few alcohol companies stack up against the giant Molson Coors in the country, Corby Spirit and Wine (TSX:CSW.A), a small-cap company, offers a much more attractive yield. It’s also a well-known name in the local alcohol industry that owns and represents about 25 brands, including the famous vodka brand Absolut.

The company is currently offering a juicy 5.6% yield to its investors, thanks to the decline it recently experienced. This is enough to start a passive income of about $233 per month with $50,000 invested in the company.

Its history of payouts is slightly unstable. In the last five years, it has slashed its payouts twice, but the cut was never too deep. And now, it has grown its payouts by a sizeable margin, surpassing the baseline it cut its dividends at.

A sweet dividend investment

When it comes to reliable dividend payers with a market cap in millions instead of billions, one name that’s quite frequently taken is Rogers Sugar (TSX:RSI). Despite having a market capitalization of just $635 million, it’s a clear leader in its domain — processed/refined sugar in Canada. It’s also the global leader when it comes to maple syrup.

As a dividend payer, Rogers offers a decent mix of reliability and high yield, which is currently 5.9%, despite the modest appreciation the stock has experienced in the last couple of years. At this rate, you can create a monthly income stream of about $246 by investing $50,000 in the company. It hasn’t changed its payouts since 2014, and the payout ratio is in the safe zone (80%).

A REIT

The most comprehensive list of dividend companies includes a REIT, and it’s easy to see why. However, Dream Industrial REIT (TSX:DIR.UN) is coveted for more than just its dividends. The REIT offers a healthy capital-appreciation potential, though it’s hard to spot in the recent stock patterns. It’s experiencing a hard slump and has already fallen almost 30%.

The positive side of this fall is the yield, which has risen to an interesting number of 5.75%, which is quite decent compared to the REIT’s historical yield. And if you invest $50,000 in it, you can expect a monthly income of about $239. The payout ratio is in the extremely safe territory, especially for a REIT, and the stock is not just discounted; it’s quite undervalued as well.

Foolish takeaway

If you have $150,000 to invest in these three dividend payers ($50,000 each), you can end up with a monthly passive income of about $718. That’s a sizeable enough income to augment your primary income and comes from diversified sources. The current bear market is partially responsible for the attractive yields all around.

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 Adam Othman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends CORBY SPIRIT AND WINE LTD CLASS A. The Motley Fool recommends DREAM INDUSTRIAL REIT.

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