Want $500 in Passive Income Each Month? Buy 3,244 Shares of This TSX Stock

Here’s a fundamentally strong TSX dividend stock that can help you make $500 in monthly passive income.

| More on:
Payday ringed on a calendar

Image source: Getty Images

If you wish to earn monthly passive income in Canada, dividend investing can be of great help. By investing your hard-earned savings in some quality dividend stocks, you can expect to earn reliable monthly passive income, even in difficult market conditions. In this article, I’ll highlight one of the best TSX dividend stocks you can buy right now to make $500 in passive income each month.

Top dividend stock for monthly passive income in Canada

Whether you’re investing to retire early or earn extra cash each month, you should always ensure that you invest in companies with strong fundamentals and a resilient business model. This rule will help you filter out businesses with weak growth outlooks that could potentially increase your risk profile.

With that in mind, SmartCentres Real Estate Investment Trust (TSX:SRU.UN) could be worth investing in right now. After rallying by 40% in 2021, the shares of this Vaughan-headquartered real estate investment trust (REIT) have seen a 16.7% downward correction in 2022 so far to trade at $26.82 per share and currently has a market cap of $3.9 billion. At this market price, SmartCentres offers a solid annual dividend yield of 6.9% and distributes its dividend payouts every month.

What makes this TSX dividend stock worth considering now?

SmartCentres REIT currently owns 185 properties across Canada with 98.1% committed occupancy. In order to accelerate its financial growth in the coming years, the REIT is focusing on its intensification program, which is expected to add millions of square feet of space to its already strong portfolio. Moreover, its strong dividend-growth track record makes its stock even more attractive right now. Notably, SmartCentres REIT has raised its dividend by 20% in five years between 2016 and 2021.

In the last year, the stock market has seen a massive selloff due mainly to worries about high inflation and rapidly rising interest rates, which have raised their potential of a moderate recession in the near term. Given these uncertain market conditions, investors should focus on the stocks whose profitability won’t be severely affected by these macroeconomic factors.

For example, SmartCentres REIT earns more than 60% of its rental income from large companies with strong creditworthiness involved in providing essential services. To name a few, Walmart, Loblaw, Canadian Tire, Lowe’s, Dollarama, McDonald’s, Scotiabank, Dollar Tree, Metro, and Home Depot are among its list of tenants. That’s why short-term economic pressures might not have a major impact on its long-term growth outlook.

SmartCentres REIT$26.823,244$0.15417$500Monthly
Prices as of Dec 23, 2022

Bottom line

If you buy about 3,244 shares of SmartCentres REIT now, you can expect to earn $500 a month in passive income from its dividends. However, to buy these many shares at the current market price, you’ll have to invest about $87,004 in this TSX dividend stock right now. With this example, you can now understand how easily you can start earning monthly passive income in Canada with dividend investing. Nonetheless, you should always diversify your portfolio to minimize risk instead of pouring a big sum of money into 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 recommends Bank Of Nova Scotia, Home Depot, SmartCentres Real Estate Investment Trust, and Walmart. 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 dividends
Dividend Stocks

2 TSX Stocks With a Dividend Bump Coming

These two top TSX stocks have lengthy dividend growth streaks and are high-quality companies, making them ideal investments for passive…

Read more »

edit Woman calculating figures next to a laptop
Dividend Stocks

2 TSX Stocks I’ll Be Buying Hand Over Fist in February 2023

Top TSX stocks such as Brookfield Asset Management have the potential to deliver outsized gains to shareholders this year.

Read more »

edit Business accounting concept, Business man using calculator with computer laptop, budget and loan paper in office.
Dividend Stocks

How to Generate $500 in Tax-Free Passive Income Per Month

While the stock market is unpredictable, you can make a calculated investment and get a fixed passive income under a…

Read more »

grow money, wealth build
Dividend Stocks

3 TSX Stocks With 25 Years of Consecutive Dividend Growth

TSX stocks like Enbridge (TSX:ENB) should be on your Dividend Aristocrats watchlist.

Read more »

Business people standing near houses models
Dividend Stocks

Why Canadian Apartment Properties REIT Notched a 15% Gain in January 2023

CAPREIT may not look like a deal at the outset, but long-term growth projections would disagree – especially when considering…

Read more »

edit Businessman using calculator next to laptop
Dividend Stocks

1 Oversold Dividend Stock (With a 8% Yield) I’m Buying Right Now

Real estate investment trusts Northwest Healthcare offers investors a tasty dividend yield of almost 8%.

Read more »

A red umbrella stands higher than a crowd of black umbrellas.
Dividend Stocks

2 Recession-Resistant Stocks to Buy for Steady Gains in 2023

Investors worried about a recession can look to buy utility stocks such as Hydro One and Waste Connections right now.

Read more »

Dial moving from 4G to 5G
Dividend Stocks

Down by 15%: Is BCE Stock a Good Investment in January 2023?

Few companies are truly “too big to fail,” but most market leaders are far more resilient against market headwinds or…

Read more »