Canadians have been working hard this year to make ends meet. Inflation keeps rising, as do interest rates, and I’m sure you’re sick of hearing about it. But, if you’re looking to generate cash flow, it’s important that you arm yourself with knowledge.
We could all use some extra cash, which is why today I’m going to focus on one Canadian stock in particular. This stock can bring in $5,000 of passive income this year if you invest right now. That’s $5,000 pretty much guaranteed, connected only to the dividend and nothing else. And with the economy rebounding, you can eventually look forward to even more.
So let’s get into this Canadian stock, and look at why it’s one everyone should hold.
Granite REIT
Granite REIT (TSX:GRT.UN) doesn’t have the highest dividend, the highest returns, or the largest portfolio. But it does offer something great: stability. That stability comes from its investments in industrial, warehouse, and logistics properties.
If you were to look at the company’s performance over the last few months, you’d have no idea there’s been a market downturn. And I mean this in several ways. Granite has become the Canadian stock to beat in the industrial property industry. These properties are sorely needed right now during a time of severe supply constraints. Further, they’re incredibly cheap to run. So the company can pretty much sit back, collect cash, and use it to buy more properties.
Which it has. During the last quarter, Granite closed $193.6 million in acquisitions. Same property net operating income also increased by 4.6% year-over-year, with funds from operations up to $1.05 per unit from $0.93 per unit. All that to say this Canadian stock is not just holding steady, but growing.
Still cheap
This Canadian stock, however, has been beaten down due to the economy. Shares are down 22.5% year-to-date at the time of this writing. Even still, that’s an improvement. Over the last few weeks, shares are up about 10%.
So now could be a great time to get in on this consistent growth. Especially as the Canadian stock remains so incredibly cheap. Granite currently trades at just 3.02 times earnings. It also offers 0.92 times book value. All while holding a stable 4.02% dividend yield.
That passive income is paid out monthly to investors of the Canadian stock, and has grown at a compound annual growth rate (CAGR) of about 3.96% over the last decade. Its shares are up 232% in that time, for a CAGR of 13.36%.
Make that $5K
How can this Canadian stock bring you $5,000 this year? Let’s break it down. With a dividend of $3.10 per year, that would mean you need to buy 1,613 shares. Shares cost about $80 right now, so you’re looking at an investment of $129,040. Sure, it’s a lot. But remember, these gains aren’t even connected to how the company’s shares perform. So if it were to return to pre-fall prices, that $129,040 could turn into $169,365!
And let’s not forget we should be holding this stock long term. So if you were to hold Granite for another decade and see the same growth, that’s when things really get interesting. Based on historical movement and reinvesting dividends, your portfolio could be worth $577,739! All while bringing in that sweet passive income.
