Get Passive Income of $435/Month With This TSX Stock

Here’s how dividend investing in Canada could help you get reliable monthly passive income.

| More on:
A close up image of Canadian $20 Dollar bills

Image source: Getty Images

Most new investors usually start their investment journey by pouring money into rallying high-growth stocks. However, neither the bull market nor the bear market lasts forever. Experienced investors can tell you the importance of having some quality dividend stocks in your portfolio. Many well-established Canadian companies continue to reward their investors with healthy dividends, irrespective of economic and market cycles, which act as a source of monthly passive income for investors.

In this article, I’ll discuss how you can easily get $500 in passive income each month without worrying about market trends.

How to get monthly passive income in Canada

Although investing in stocks always involves risks, you can try to minimize your risks by adding some low-volatility dividend stocks to your portfolio. This is one of the key reasons you must pay more attention to a monthly dividend-paying stock’s financial growth trends and fundamentals than its dividend yield. Keeping this principle in mind, Pembina Pipeline (TSX:PPL) could be a reliable TSX monthly dividend stock to invest in right now.

Pembina is a Calgary-based energy transportation and midstream services company with a market cap of $26.3 billion. While macroeconomic uncertainties have driven the TSX Composite benchmark down by more than 4% in 2022, PPL stock has risen about 24% on a year-to-date basis to $47.42 per share. At this market price, the stock offers an attractive annual dividend yield of around 5.5% and distributes its dividend payouts every month. Now, I’ll talk about some key factors that make it a great monthly dividend stock to own in Canada.

Key reasons to buy this TSX monthly dividend stock

Pembina Pipeline has been a part of the North American energy infrastructure industry for over six-and-a-half decades. And it has a well-proven track record of delivering shareholder value and dividend growth, making it one of the most attractive monthly dividend stocks on the TSX to consider.

In the five-year period between 2016 and 2021, the company’s total revenue more than doubled from $4.3 billion to $8.6 billion with the help of consistently growing demand for its integrated infrastructure solutions. During these five years, its adjusted earnings jumped by 97% from $1.01 per share to $1.99 per share. Its consistent financial growth is the key reason why Pembina’s dividend per share also grew by about 33% during this period.

I expect the energy firm’s financial growth trend to improve further in the coming years, as it focuses on expanding its global presence, lower carbon energy generation, and new carbon capture, utilization, and storage space opportunities. These positive factors should help this monthly dividend stock continue soaring in the long run.

Pembina Pipeline$47.422,000$0.218$435Monthly
Prices as of Nov. 23, 2022

Bottom line

If you purchase about 2,000 shares of Pembina Pipeline at the current market price, you can expect to earn $435 in monthly passive income, which is equivalent to $5,220 a year. However, to purchase 2,000 shares of this TSX monthly dividend stock, you’ll need to make an investment of $94,840. While dividend investing is a great way to get passive income, you must try to minimize your risks by adding more such stocks to your portfolio instead of investing a large amount of money in a single company.

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

More on Dividend Stocks

edit Person using calculator next to charts and graphs
Dividend Stocks

Better Buy: Fortis Stock vs Enbridge

Fortis stock and Enbridge are top dividend stocks on the TSX today. Which stock is better buy for safe dividend…

Read more »

Canadian Dollars
Dividend Stocks

How to Make $1,500 in Passive Income 4 Times a Year

Blue-chip TSX stocks such as Enbridge can enable investors to create game-changing wealth over the long term.

Read more »

Dividend Stocks

TFSA: How to Easily Turn $10,000 Into $500/Year of Passive Income

You don't need to be a stock market expert to turn $10,000 into a $500 of tax-free passive income. Here's…

Read more »

protect, safe, trust
Dividend Stocks

Worried About a Recession? 2 TSX Blue-Chip Stocks to Protect Your Capital

If you fear a recession coming on soon, here are two blue-chip Canadian stocks to add to your portfolio for…

Read more »

Silver coins fall into a piggy bank.
Dividend Stocks

New TFSA Investors: 2 Top TSX Stock to Create a Self-Directed Retirement Fund

Top TSX dividend stocks are now on sale for new TFSA investors.

Read more »

money while you sleep
Dividend Stocks

Worried About the Market? 2 Dividend Stocks That Let You Sleep at Night

Here's why Restaurant Brands (TSX:QSR) and Enbridge (TSX:ENB) are two top dividend stocks to buy in this uncertain market right…

Read more »

money cash dividends
Dividend Stocks

How 1 Absurdly Cheap Stock Can Generate $100 in Monthly Passive Income

You can generate $100 or more in monthly passive income from one high-yield stock trading at an absurdly cheap price…

Read more »

Retirees sip their morning coffee outside.
Dividend Stocks

How I’d Invest $1000 in February to Make Easy Passive Income

Looking to earn some extra passive income in February but don't have much cash? Build an easy portfolio with these…

Read more »