Passive-Income Power: How to Churn Out Over $120/Week for the Rest of 2022

Canadians hungry for passive income in this turbulent market should target dividend stocks like Extendicare Inc. (TSX:EXE).

Ambrose O'Callaghan

Ambrose O'Callaghan graduated with a BA in Political Science from McMaster University. After that, he jumped into the banking world. He worked from the front line to an investment associate role. After that, he found a way to marry his experience and knowledge in the world of banking and finance to his love and passion for writing. Ambrose is a passionate believer in Warren Buffett's value investing model.

Published August 31, 2022 11:30 am EDT

The S&P/TSX Composite Index plunged 323 points on Tuesday, August 30. Every segment on the TSX finished the trading session in the red. The worst-performing sectors included battery metals, base metals, energy, and health care. Canadian investors may want to consider pursuing a passive-income strategy in this choppy market.

Today, I want to discuss how you can look to generate triple-digit weekly passive income for the rest of 2022. In this scenario, we are going to utilize all our Tax-Free Savings Account (TFSA) room and round it out to $100,000 in total with $19,500 in a cash account. Let’s dive in.

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This dividend stock is undervalued and can provide big passive income

Extendicare (TSX: EXE) is a Markham-based company that provides care and services for seniors across Canada. Shares of this healthcare stock have dropped 2.9% in 2022 as of close on August 30. The stock has declined 11% in the year-over-year period.

This company released its third-quarter fiscal 2022 results on August 9. It delivered revenue growth of 5.3% to $296 million. Meanwhile, net operating income (NOI) jumped $1.4 million year over year to $30.3 million.

The stock closed at $7.20 per share on August 30. In our hypothetical, we can snag 5,660 shares of Extendicare for a purchase price of $40,752 in our TFSA. It offers a monthly dividend of $0.04 per share, which represents a tasty 6.6% yield. This will allow us to churn out weekly tax-free passive income of $52.24.

Here’s a REIT you should look to target as we look to September

Northwest Healthcare REIT (TSX:NWH.UN) is a Toronto-based real state investment trust (REIT) that owns and operates a global portfolio of high-quality healthcare real estate. Shares of this REIT have dropped 7.7% in 2022 as of close on August 30. The stock is down 4.7% year over year.

In the second quarter 2022, Northwest Healthcare reported total revenue of $111 million — up 24% from the previous year. The REIT reported same-property net operating income (NOI) growth of 3.6% and strong portfolio occupancy of 97%. Moreover, net asset value (NAV) per unit jumped 8% to $14.19.

This REIT closed at $12.62 on August 30. That means we can buy 3,227 shares for a purchase price of $40,724. Northwest Healthcare offers a monthly distribution of $0.067 per share, which represents a 6.3% yield. This purchase will allow us to churn out passive income of $49.89 in our TFSA.

Investors building a passive-income portfolio should also target this energy stock

Pembina Pipelines (TSX: PPL)(NYSE: PBA) is the third dividend stock I’d target to round out our passive-income portfolio today. This Calgary-based company provides transportation and midstream services for the energy industry. Shares of this energy stock have increased 22% in the year-to-date period.

This stock closed at $47.16 per share on August. We can snag 413 shares of Pembina in our cash account. That comes to a purchase price of $19,477. The stock last paid out a monthly dividend of $0.21 per share, representing a strong 5.3% yield. This purchase will allow us to churn out weekly passive income of $20.01.

Bottom line

These investments will allow you to generate tax-free passive income of $102.13 and passive income of $20.01 in the cash account. That works out to a total just above $120 per week.