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.

Amy Legate-Wolfe

Author Bio Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Her work can also be found at Canada's National Observer, where she writes on the business side of climate action. Before joining Motley Fool Canada, Amy wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Social Media Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published January 16, 2023 9:00 am EST

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.

COMPANY	PRICE	NUMBER OF SHARES	DIVIDEND	TOTAL PAYOUT	FREQUENCY	TOTAL INVESTMENT
SRU.UN: today	$27.84	649	$1.85	$1,200	annually	$18,068.16
SRU.UN: highs	$33.48	649	$1.85	$1,200	annually	$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.