It’s a really hard time to convince Motley Fool investors to put their cash to work. While right now is arguably the best time with passive-income stocks so low, it’s also the worst on your wallet. Rising inflation and interest rates coupled with an incoming potential recession makes it incredibly difficult to decide on where to put your cash.
However, I would argue that there are two things Motley Fool investors need to do. The first: look over your budget again and see what you can afford to put aside. If you were putting aside $500, even slicing it in half means you could be investing $250 each month towards passive-income stocks. What’s more, you can pick up Dividend Aristocrats that will continue to create payments long after a recession has passed.
Three passive-income stocks I’d buy right now
A recession looks to be in the near future, according to the United States Federal Reserve. And it could really hurt in Canada, where we are now the G7 country with the most unaffordable housing. But don’t worry; there is a way we can start making that money back. A great start would be investing in long-term Dividend Aristocrats like these.
- BCE (TSX: BCE)(NYSE: BCE)
- Canadian Imperial Bank of Commerce (TSX: CM)(NYSE: CM)
- CT REIT (TSX: CRT.UN)
Ahead of the rest
One of the best investments Motley Fool investors can make is into Canadian telecommunications. There are few to choose from. Making an investment practically guarantees that you’ll see returns — especially when you invest in passive-income stocks like BCE stock.
BCE stock is the largest of the telecommunication companies by market capitalization. Further, it’s seen revenue climb thanks to the rollout of its 5G network and fibre to the home. It remains a strong performer, offering a dividend of 5.76% as of writing.
Shares are steady from where they were at the beginning of 2022, and it trades at a fair 19.7 times earnings. So, here it’s about getting defensive. Buying a company that can prove it will continue performing, even in the face of a recession. As of writing, BCE stock is one of the passive-income stocks with a dividend that’s grown at a compound annual growth rate (CAGR) of 5.52% in the last decade.
The best bank for dividends
If you want passive-income stocks, you’ll want to look at the Big Six banks. But of them, Canadian Imperial Bank of Commerce still offers the highest dividend per share. The bank continues to bring in new clients to support a growing dividend. This comes, as CIBC stock looks to expand into wealth and commercial management and emerging markets, and offer better customer service.
The Big Six banks are going through a tough time because of inflation and interest rates. No one can afford to take out a loan, so loan losses are prevalent. That being said, each has provisions for loan losses that have seen the banks protect themselves during recessions. So, this is absolutely a great play during a recession and for decades to come.
Shares of CIBC stock are down 12% year to date, trading at just 8.3 times earnings. Plus, you can lock in a dividend yield of 5.1% as of writing that’s grown among passive-income stocks at a CAGR of 5.22% in the last 10 years.
100 years and beyond
CT REIT is the last I’ll cover here, but that doesn’t make it the least. Its parent company Canadian Tire just celebrated its 100-year anniversary. That’s 100 years of this Canadian icon being around, and it doesn’t look like it’s going anywhere. The company has the space through its real estate properties to load up on products to get around supply shortages. Further, it offers cheaper options for Canadians, even during inflation.
That’s allowed CT REIT to remain steady when it comes to both lease renewals and keeping properties open and active. As for its dividend, the company recently bumped it up by 3.4% during the last quarterly report. That’s the ninth consecutive one for CT REIT.
Shares are down just 2.5% year to date, trading at 17.7 times earnings. The company offers a 5.09% dividend yield for passive-income-stock seekers. That dividend has grown at a CAGR of 2.92% over the last decade.
