TFSA Investors: Invest $20K Today and Receive $134.80 in Monthly Passive Income

TFSA investors should absolutely consider some valuable monthly passive-income stocks, but this one takes the cake.

| More on:
Businessperson's Hand Putting Coin In Piggybank

Image source: Getty Images

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.

NWH.UN – today$9.892,022$0.80$1,617.60annually$20,000
NWH.UN – highs$14.422,022$0.80$1,617.60annually$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.

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.

Fool contributor Amy Legate-Wolfe has positions in NorthWest Healthcare Properties Real Estate Investment Trust. The Motley Fool recommends NorthWest Healthcare Properties Real Estate Investment Trust. The Motley Fool has a disclosure policy.

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 »