Want $1,000 in Monthly Passive Income? Buy 12,821 Shares of This TSX Stock

Here’s how investing in this fundamentally strong TSX dividend stock could help you earn reliable monthly passive income.

| More on:
funds, money, nest egg

Image source: Getty Images

The stock market selloff is continuing to make Canadian investors wary in 2022. As high inflation has forced central banks in Canada and the U.S. to take aggressive policy measures by rapidly raising interest rates, investors fear that these steps could lead to a recession in the near term. In such a difficult market environment, it really helps if you own some quality monthly dividend stocks in your portfolio.

In this article, I’ll talk about one of the best monthly TSX dividend stocks you can buy right now to earn $1,000 in passive income each month.

The best TSX dividend stock for monthly passive income

While picking a high-yield dividend stock to generate reliable monthly passive income, investors must pay attention to that company’s recent financial growth trends and fundamental outlook. This is one of the best ways you can filter out weak stocks that might increase risks to your portfolio.

Ideally, investors should also try to buy dividend stocks on the dip when they look undervalued. Considering all that, I find Sienna Senior Living (TSX:SIA) really attractive to buy right now to hold for the long term. It’s a Markham-headquartered firm with a market cap of about $862 million and is among TSX Composite components. Its stock currently trades with 22% year-to-date losses at $11.71 per share.

By comparison, the TSX Composite benchmark has lost 10.6% of its value this year so far. At the current market price, SIA stock has a very attractive dividend yield of around 8%, and the company distributes its dividend payouts on a monthly basis.

What makes this monthly dividend stock worth considering?

Sienna Senior Living mainly focuses on providing seniors’ living options, including long-term care, assisted living, independent living, and memory care. To provide these services, the company owns and operates 80 seniors’ living residences across Saskatchewan, British Columbia, and Ontario. It also manages 13 third-party residences.

The COVID-19 pandemic-driven challenges led to a drop in Sienna’s revenue and earnings in 2020. Despite that drop, its total revenue has risen by 34% in five years between 2016 and 2021. During the same period, its adjusted earnings have risen by 15%, showcasing a consistent increase in the demand for its services. You could expect the company’s financial growth to accelerate further in the future as a large part of the Canadian population grows older. Notably, the 2021 census predicted that Canada’s 85-plus age group population is likely to triple in the next 25 years.

In addition, Sienna is continuing to expand its asset base by making new acquisitions in its domain, which should help it further expand its footprint across Canada and boost financial growth in the coming years. These positive factors make it a very reliable TSX dividend stock to buy now to earn monthly passive income.

Bottom line

If you buy 12,821 shares of Sienna Senior Living at the current market price, you can earn $1,000 in passive income each month or $12,000 yearly. But to own these many shares, you would need to invest $150,134 in its stock right now. While this example gives you a good idea of how you can start earning monthly passive income by investing in Canadian dividend stocks, you must always consider diversifying your investment portfolio by including more such dividend stocks to it instead of pouring in such a big sum of money in a single stock.

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.

The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Fool contributor Jitendra Parashar has no position in any of the stocks mentioned.

More on Dividend Stocks

grow money, wealth build
Dividend Stocks

Got $3,000? 3 TSX Growth Stocks to Buy in January 2023

Top TSX growth stocks that look appealing for 2023.

Read more »

woman data analyze
Dividend Stocks

Need Passive Income? Turn $15,000 Into $851 Annually

This passive-income stock is already climbing higher, up 16% in the last three months! Yet it's still valuable, so you…

Read more »

Senior Man Sitting On Sofa At Home With Pet Labrador Dog
Dividend Stocks

Retirees: 3 Reliable Canadian Dividend Stocks to Buy Now for Passive Income

Top TSX dividend stocks now appear oversold.

Read more »

Dividend Stocks

For $100 in Passive Income Each Month, Buy 1,500 Shares of This REIT

REITs such as Northwest Healthcare can enable investors create a passive-income stream as well as benefit from capital gains.

Read more »

A colourful firework display
Dividend Stocks

2 Canadian Growth Stocks (With Dividends) to Start 2023 With a Bang

Here are two of the best dividend-paying Canadian growth stocks you can invest in at the start of 2023 and…

Read more »

sale discount best price
Dividend Stocks

4 Insanely Cheap Canadian Stocks to Buy for Passive Income

The recent bear market has created some incredible bargains, especially for those looking for passive income. Here are four cheap…

Read more »

A bull outlined against a field
Dividend Stocks

3 Cheap Stocks I’d Buy Before the Bull Market Arrives

Undervalued TSX stocks such as Savaria and Well Health can help investors generate market-beating gains when markets recover.

Read more »

Increasing yield
Dividend Stocks

5 Canadian Dividend Stocks With Yields of 4% or More

If you want dividends that yield over 4%, you don't have to look far. Here are five large-cap Canadian stocks…

Read more »