Value and dividends: it’s the ideal combo these days. It’s even better when you get those dividends each month. But what should also be considered is security. It’s not going to be great if suddenly shares plummet or, worse, your dividend is cut into oblivion.
Today, my goal is to show how a $20,000 investment could create incredible passive income each month. What’s more, if you put it in your Tax-Free Savings Account (TFSA), all that income will be (you guessed it) tax free!
Now, what is this great stock that’s going to get you all that income? It’s none other than NorthWest Healthcare Properties REIT (TSX:NWH.UN).
Safe and soaring
Shares of NorthWest REIT haven’t been soaring lately. But the benefit for NorthWest stock is that it’s in the secure healthcare sector. Health care is always a solid choice during a potential recession, which is why I would recommend it at the outset.
However, if you’re looking for passive income, then NorthWest REIT is an excellent choice these days. With shares down and in value territory, you can look forward to the next few years bringing in more passive income than you thought possible. Further, you can look forward to stable and growing returns from a share recovery.
It’s also stable because of the company’s diverse range of healthcare properties in locations around the world. So, whether the United States takes longer, and Netherlands comes out of a recession first, NorthWest REIT has exposure. So, you can lock up these rates knowing you’ll be able to continue receiving them no matter what’s happening in the market.
Value on value
If you’re buying this passive-income stock today, there are a few ways you can lock in value. First off, shares of NorthWest REIT trades at just 8.52 times earnings as of writing. But also, those shares are down 21% in the last year alone.
It’s important to note this isn’t because NorthWest REIT did anything wrong. It’s mainly because it’s in the real estate sector and a pandemic stock that climbed after the COVID crash back in 2020. So, there was a correction needed, but it is now far below where fair value estimates it should be.
Based on fundamentals, this passive-income stock is bound for greatness. It currently trades at just 0.94 times book value as well, and it would take just 93.62% of equity to cover all its debts. No matter how you slice it, locking in that dividend yield at 8.18% looks like a steal.
Make that money
If you were to put $20,000 from your TFSA into NorthWest REIT, there are a few things I would have you watch. First off, there’s the monthly income itself. That’s not going any where. However, I also want you to consider what would happen should this stock reach 52-week highs once more. Let’s see what that would mean below.
| COMPANY | PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
| NWH.UN – today | $9.89 | 2,022 | $0.80 | $1,617.60 | annually | $20,000 |
| NWH.UN – highs | $14.42 | 2,022 | $0.80 | $1,617.60 | annually | $29,157.24 |
As you can see, your shares could turn into $29,157.24 back at 52-week highs! With dividends added, that’s total returns of $10,774.84! Meanwhile, you can look forward to monthly passive income of $134.80 starting right now.
