TFSA Investors: Make $200 Monthly in Passive Income and $3,660 in Returns in 2023

Passive-income seekers can get a major deal on this top dividend stock and create incredible returns for 2023 and beyond.

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The Tax-Free Savings Account (TFSA) recently added a new amount of contribution room for investors to consider. That $6,500 can be used for anything, but this year, many are considering using it for passive income through dividends.

But I encourage investors to think beyond just dividends. After all, what good is a dividend stock for passive income if you’re losing share value?

With that in mind, there is certainly one passive-income stock I would urge TFSA investors to consider for monthly income in 2023.

SmartCentres REIT

SmartCentres REIT (TSX:SRU.UN) is a strong option for TFSA investors these days. Many might still consider it one of those retail real estate investment trusts (REIT). Certainly it is, creating long-standing partnerships with companies like Wal-Mart, which doesn’t hurt.

But it’s also grown beyond that. SmartCentres REIT is now expanding primarily into two areas. The first is industrial properties, allowing it to bring in rents from storage buildings that could connect to its retail locations. The other is retirement spaces, which continues to be in high demand with an aging baby boomer population.

With occupancy actually rising, and earnings coming in above estimates, SmartCentres REIT is a strong choice as a passive-income stock. So, let’s see how to get you that passive income today.

Bring in income

SmartCentres REIT is also a great choice, because it has a solid dividend, at a great price. As of writing, the passive-income stock trades at just 4.92 times earnings. On top of this, you can lock up a whopping 6.74% dividend yield at these rates!

The company also has a long history of growth we can look back on to see how those shares will perform in the future. Over the last 20 years, shares are up 1,000%, for a compound annual growth rate (CAGR) of 12.74%. As for its dividend, it’s risen by a CAGR of 1.8% in the last decade.

However, shares are currently down 6.22%. That means you can lock up this strong stock while it’s down, despite solid performance. Now, let’s get to the good part.

Create $200 in passive income

Let’s get down to it. If you’re an investor wanting to bring in $200 per month in passive income, that would mean you want to create $1,200 in annual passive income at these rates. We’ve seen that shares have come down. So, let’s say those shares climb back up to previous 52-week highs of about $34.

Here’s what that would get you if you were to purchase right now.

COMPANYPRICENUMBER OF SHARESDIVIDENDTOTAL PAYOUTFREQUENCYTOTAL INVESTMENT
SRU.UN: today$27.84649$1.85$1,200annually$18,068.16
SRU.UN: highs$33.48649$1.85$1,200annually$21,728.52

As you can see, should shares climb back to 52-week highs, you’re looking at a future investment of $21,728.52! That’s returns of $3,660.36, and $4,860.36 including dividends. So, if you’re looking for a solid future investment with tons in monthly passive income, I’d highly recommend SmartCentres REIT.

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 no position in any of the stocks mentioned. The Motley Fool recommends SmartCentres Real Estate Investment Trust and Walmart. The Motley Fool has a disclosure policy.

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