My 3 Favourite TSX Stocks for Passive Income

Investors who want to churn out passive income in this market should look to TSX stocks like Freehold Royalties Ltd. (TSX:FRU) and others.

| More on:
money cash dividends

Image source: Getty Images

The S&P/TSX Composite Index posted a triple-digit-point loss to start this week. It was the fifth triple-digit loss in the past six trading sessions. Fortunately, the TSX Index was up 139 points as of mid-morning trading on September 27. Today, I want to look at three of my favourite TSX stocks to snatch up for passive income in this choppy market. Let’s jump in.

This TSX stock is designed to consistently reward its shareholders with passive income

Freehold Royalties (TSX:FRU) is a Calgary-based oil and gas royalty company. Shares of this dividend stock have climbed 11% in 2022 at the time of this writing. Its shares have shot up 29% in the year-over-year period.

Investors got to see this company’s second-quarter (Q2) fiscal 2022 earnings on August 9. It reported funds from operations (FFO) of $83.8 million — up 109% from $40.2 million in the second quarter of fiscal 2021. FFO per share jumped 81% to $0.56. Freehold has benefited from a robust oil and gas sector throughout the year. Shareholders on the hunt for consistent and strong passive income should look to this stock right now.

Shares of this TSX stock currently possess a favourable price-to-earnings (P/E) ratio of 12. It offers a monthly dividend of $0.09 per share. That represents a monster 8% yield.

Here’s a dependable REIT that can help you churn out big passive income in 2022

Real estate investment trusts (REITs) are another great source of passive income on the Canadian market. Northwest Healthcare REIT (TSX:NWH.UN) remains one of my favourite REITs to target in the current climate. This TSX stock owns and operates a global portfolio of high-quality healthcare real estate. Its shares have dropped 22% in 2022 as of mid-morning trading on September 27. That has pushed the stock into negative territory year over year.

The REIT unveiled its second-quarter fiscal 2022 earnings on August 11. It posted revenue growth of 24% to $111 million. Meanwhile, total assets under management (AUM) jumped 22% to $10.2 billion. Moreover, net asset value (NAV) per unit increased 8% year over year to $14.19.

This TSX stock last had a very attractive P/E ratio of 5.6. Investors hungry for passive income can count on its monthly distribution of $0.067 per share, representing a very strong 7.5% yield.

One more TSX stock I’d snatch up for its monthly dividends

Extendicare (TSX:EXE) is a Markham-based company that provides care and services for seniors across Canada. Shares of this TSX stock have dropped 9.5% in the year-to-date period. The stock is down 12% compared to the same period in 2021.

In Q2 2022, the company delivered revenue growth of 5.3% to $296 million. This was powered by long-term-care (LTC) funding enhancements, home healthcare billing rate hikes, and growth in other key areas. Moreover, net operating income jumped $1.4 million to $30.3 million.

Shares of this TSX stock currently possess an attractive P/E ratio of 8.2. Passive-income investors can rely on its monthly dividend of $0.04 per share. That represents a super 7.1% yield.

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 Ambrose O'Callaghan has no position in any of the stocks mentioned. The Motley Fool recommends FREEHOLD ROYALTIES LTD. and NORTHWEST HEALTHCARE PPTYS REIT UNITS. The Motley Fool has a disclosure policy.

More on Investing

Retirees sip their morning coffee outside.

Here’s the Average RRSP Balance at Age 65 and 71 in Canada

Canadian investors can consider holding dividend stocks and supplement their CPP and RRSP payouts in retirement.

Read more »

Dividend Stocks

10 Years From Now, You’ll Be Glad You Bought These Magnificent TSX Dividend Stocks

The TSX is lucrative to buy these magnificent dividend stocks in bulk and be proud of this decision 10 years…

Read more »

sale discount best price
Energy Stocks

Time to Pounce: 1 Phenomenal TSX Stock That Hasn’t Been This Cheap in a While

Now could be the time to get into Cameco (TSX:CCO) stock, which is up 81% in the last year but…

Read more »

Digital background depicting innovative technologies in (AI) artificial systems, neural interfaces and internet machine learning technologies
Tech Stocks

3 Millionaire-Maker Tech Stocks That Should Be on Your Radar

These three tech stocks have already proven themselves worthy, but have a lot more to prove in the near future.…

Read more »

A close up image of Canadian $20 Dollar bills
Tech Stocks

3 No-Brainer Stocks to Buy With $20 Right Now

These three stocks are easy buys for those who don't have all that much to spend, and want long-term growth…

Read more »

calculate and analyze stock
Dividend Stocks

4 Fabulous Dividend Stocks to Buy in July

Are you looking for long-term income? These four dividend stocks should not only provide you with value in July but…

Read more »

Hand arranging wood block stacking as step stair with arrow up.
Stocks for Beginners

The Top 3 Long-Term TSX Growth Stocks to Buy Today

These three growth stocks might be some of the best-performing stocks of the last year, but according to analysts so…

Read more »

financial freedom sign
Dividend Stocks

5 Steps to Financial Freedom for Canadian Millennials

Follow these steps and nothing can stop Canadian millennials from achieving their early retirement dreams.

Read more »