Earning passive income in Canada is not as hard as one might think. You don’t need to be a financial professional to earn a solid, growing passive-income stream. Now, that doesn’t mean it won’t take work. There is no get-rich-quick formula when it comes to investing.
You will need to put time in to study and understand businesses. You will need to complete due diligence on your investments and exercise extreme patience a times (especially when the market is volatile). Yet, investing long term can be a very rewarding experience.
Canada has many great large-cap stocks that pay attractive dividends. In fact, you won’t have to look far to buy a portfolio that generates over $5 per day. You will need around $45,000 of capital. Here is one hypothetical portfolio that could do just that.
A top Canadian energy stock for passive income
Canadian Natural Resources (TSX:CNQ) is a top pick for dividends in Canada. It has grown its dividend annually for almost 23 years. With a market cap of $89 billion, it is Canada’s largest oil and natural gas producer. It operates in a very cyclical industry. Energy companies are dependent on energy prices.
Fortunately, CNQ has found a way to produce energy with factory-like efficiency. Its oil sands, thermal, and conventional production assets can generate free cash flow (cash after all expenses) for US$30 per barrel or less. CNQ has decades of reserves, so its production can keep growing for many years ahead.
CNQ is earning a huge cash windfall with oil over US$80 per barrel. Its balance sheet is in excellent condition, so it has plenty of options to reward shareholders (including share buybacks, base dividend growth, and special dividends).
CNQ stock yields 4.2% today. A $15,000 investment would earn $157.25 on a quarterly basis. That equates to $1.72 of passive income per day.
A top Canadian bank
With a market cap of $162 billion, Toronto-Dominion Bank (TSX:TD) is another stock most Canadians can identify with. It operates one of Canada’s most well-known retail and commercial banking franchises.
TD has earned 10% total annual returns for a decade. Likewise, it has grown its dividend annually since its initial public offering in 1995. This bank is diversified by operation segment and geography. As a result, it should be well equipped to weather a potential economic recession.
Right now, its 4.3% dividend yield is nicely above its five-year average of 3.88%, so it looks like decent value. A $15,000 investment in TD stock would earn $161.28 quarterly, and that would equal $1.77 daily.
A top renewable stock for growing passive income
Renewable energy is expected to be a very important long-term trend. With a market cap of $24 billion, Brookfield Renewable Partners (TSX:BEP.UN) is one of the largest Canadian stocks in the renewable sector.
Brookfield owns and operates very valuable hydro power assets that are complimented by wind, solar, distributed generation, and battery power projects. Further, its partnership to own Westinghouse with Cameco will make it a leader in nuclear power services around the world.
The company is set to be a dominant alternative energy leader, especially so considering its large 100-gigawatt (GW) development backlog.
Brookfield Renewable has grown its distribution by 6% compounded annual growth rate. Today, it yields 4.5%. Invest $15,000 in BEP stock and you would earn $168.78 quarterly, or $1.84 averaged daily.
|COMPANY||RECENT PRICE||NUMBER OF SHARES||DIVIDEND||TOTAL PAYOUT||FREQUENCY|
|Canadian Natural Resources||80.70||185||$0.85||$157.25||Quarterly|
|Brookfield Renewable Partners||38.58||388||$0435||$168.78||Quarterly|