The dream for many investors is to establish a consistent stream of passive income. That can be achieved in several ways. Canadians could theoretically generate passive income through a rental property, a published book, or even a YouTube channel. Today, I want to discuss how investors can make over $315/month in passive income. Better yet, we should look to add these stocks in a Tax-Free Savings Account (TFSA). In this scenario, we will commit $60,000 total. Let’s jump in.
This high-yield energy stock is perfect for a passive-income portfolio
Pembina Pipeline (TSX:PPL) is a Calgary-based company that provides transportation and midstream services for the energy industry. Shares of this energy stock have climbed 20% year over year as of close on January 26. The stock has jumped 5.9% so far in the new year. Investors who want more information can toggle the interactive price chart below.
In the third quarter of fiscal 2022, Pembina raised its adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) guidance for the full year in response to a very positive performance. Revenue in the first three quarters of FY2022 was reported at $8.91 billion — up from $6.06 billion in the prior year. Meanwhile, it posted gross profit of $2.44 billion compared to $1.86 billion in the first nine months of fiscal 2021.
This energy stock closed at $47.77 on January 26. In our hypothetical, we can snatch up 420 shares of Pembina for a purchase price of $20,063. The stock offers a monthly distribution of $0.217 per share. That represents a strong 5.4% yield. This investment allows us to generate tax-free passive income of $91.14 every month.
Don’t sleep on this REIT that also boasts strong passive income generation
Dream Office REIT (TSX:D.UN) is a Toronto-based real estate investment trust (REIT) that owns and operates high-quality office properties in major urban areas across Canada. Shares of this REIT have plunged 29% year over year as of close on January 26. However, the REIT has surged 12% so far in 2023.
This REIT closed at $17.04 on January 26. We can purchase 1,170 shares of Dream Office REIT for a total price of $19,936. Dream Office currently offers a monthly distribution of $0.083 per share, which represents a very strong 5.8% yield. The purchase will let us churn out tax-free passive income of $97.11 per month.
One more stock that also offers a monthly dividend
TransAlta Renewables (TSX:RNW) is the third and final dividend stock I’d look to target to build our passive-income TFSA portfolio in late January. This Calgary-based company develops, owns, and operates renewable power generation facilities. Shares of this renewable energy stock have dropped 28% year over year as of close on January 26. The stock has climbed 6.4% in the new year.
In the first nine months of fiscal 2022, TransAlta delivered revenues of $406 million — up from $332 million for the year-to-date period in fiscal 2021. Meanwhile, free cash flow rose to $253 million over $234 million in the prior year.
This renewable energy stock closed at $12.10 as of close on January 26. We can snatch up 1,650 shares of TransAlta for a total price of $19,965. The stock offers a monthly dividend of $0.078 per share, representing a monster 7.7% yield. That means we can generate monthly passive income of $128.70.
|COMPANY||RECENT PRICE||NUMBER OF SHARES||DIVIDEND||TOTAL PAYOUT||FREQUENCY|
|Dream Office REIT||$17.04||1,170||$0.083||$97.11||Monthly|
These investments in top monthly dividend stocks will allow us to generate over $315 in passive income every month. This is even better in tax-free installments in a TFSA.