If you’re looking to earn monthly passive income in Canada but haven’t tried investing in dividend stocks yet, you’re missing a lot. While there are many ways to generate passive income, dividend investing is one of the easiest ones. Although the recent selloff in stocks has made new investors worried, this market pullback could be an opportunity for long-term dividend investors to buy some quality stocks at a bargain.
In this article, I’ll give you an example of how you can generate $1,000 in reliable passive income for life by investing in TSX dividend stocks.
The best stocks to earn monthly passive income in Canada
Investing in stocks for the long term to earn monthly passive income is not as difficult as you might think. You mainly need to pay careful attention to a stock’s financial growth track record and its fundamental outlook before buying it. By doing so, you can filter out most companies with weak business models and shaky financial positions.
With these points in mind, Choice Properties Real Estate Investment Trust (TSX: CHP.UN) could be an amazing TSX dividend stock to consider right now to earn a reliable passive income each month. This Toronto-headquartered open-ended real estate investment trust (REITs has a quality portfolio of retail, industrial, and office properties across Canada. Now, let me quickly explain why I find TSX dividend stocks like Choice Properties great for investors seeking passive income in Canada.
Why it’s a great stock for dividend investors
The main factors that make Choice Properties REIT stand out from other monthly dividend stocks on the TSX are its stable portfolio, prudent financial management, and transformational development pipeline focused on long-term value creation. These are some key reasons why its total revenue rose by 65% in the five years between 2016 and 2021. The company’s adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) during the same period jumped by nearly 67% — reflecting the underlying strength in its financial growth trends. Its adjusted EBITDA margin also expanded to 71.9% from 70.9% in these five years.
Choice Properties owns and manages about 572 retail properties in Canada, which are mainly leased to necessity-based, financially strong tenants. For example, Loblaw, Metro, Dollarama, Walmart, Scotiabank, Canadian Imperial Bank of Commerce, Royal Bank of Canada, McDonald’s, Subway, Lowe’s, Costco, and Dollar Tree are some of the large companies from its retail tenant base.
Despite its strong financial growth trends, Choice Properties stock currently trades with about 14% year-to-date losses at $13.13 per share, making it look undervalued. However, this decline in its share prices has made its annual dividend yield look more attractive, which currently stands at 5.6%. Given that, it could be an opportunity for long-term investors to buy this great dividend stock at a bargain to earn stable monthly passive income.
Bottom line
If you want to earn $1,000 in monthly passive income (or $12,000 a year) from Choice Properties stock, you’ll need to buy about 16,219 shares at the current market price. To do that, however, you’ll have to invest a huge amount of $212,955. While this example gives you a good idea of how you can earn passive income by investing in TSX dividend stocks, you must always diversify your portfolio by including more quality stocks in it instead of investing such a large sum of money in a single stock.
