Need Passive Income? Turn $15,000 Into $851 Annually

This passive-income stock is already climbing higher, up 16% in the last three months! Yet it’s still valuable, so you can lock up a great yield today.

| More on:
woman data analyze

Image source: Getty Images.

Passive income is in high demand these days, with investors needing as much cash as they can carry with a recession on the way. The Bank of Canada also raised the interest rate to 4.5%, the highest since December 2007. So, we’re certainly needing the cash when we can get it.

The problem is, I don’t want Canadians simply buying a company for passive income and then seeing that income disappear in the years to come. That’s what can happen when you choose wrong. Instead, you need to choose the right investment for a long-term hold, and that means choosing a company that’s not going to disappear and take your income with it.

Find the right sector

There are certainly a lot of sectors out there doing well, but few that will continue to expand in the years and decades to come. Though one that continues to grow is insurance. The insurance sector not only continues to expand its offerings but is consolidating by buying up smaller insurance agencies. Furthermore, it’s attempting to expand into new countries. And that provides global diversification, which is incredibly useful during a recession.

That’s why today I’ll be looking at Great-West Lifeco (TSX:GWO). GWO stock is a solid option for those seeking passive income. The insurance company already operates around the world, providing a diversified stream of revenue that will help investors during a recession. Yet it also continues to buy up smaller, and even larger, insurance agencies.

But the passive-income stock goes beyond providing life and healthcare insurance. It also provides protection for corporations, along with wealth management consulting. These are hugely lucrative arms that will continue to see the company thrive.

Remains valuable

The big bonus for buying GWO stock right now is that the passive-income stock is actually cheap on the TSX today. GWO stock trades at just 10.89 times earnings as of writing, offering up a dividend yield at 5.71% as well! That’s huge considering shares are now down 4% in the last year alone.

The good news as well is that GWO stock is now on the rise. While still down in the last year, shares have increased by 16% in the last three months alone. So, it looks like you may be able to lock up some growth in the near future, while still bringing in passive income at a valuable rate.

Now, let’s get to the good stuff. Let’s say you’re a Canadian investor who wants to take advantage of this valuable stock and bring in more passive income at a great price. You have $15,000 you want to put towards GWO stock, so let’s see what that can get you. Let’s take it further. Let’s also look at what your portfolio could be should shares return to 52-week highs, with dividends included.

COMPANYRECENT PRICENUMBER OF SHARESDIVIDENDTOTAL PAYOUTFREQUENCYTOTAL INVESTMENT
GWO$34.54434$0.49$212.66Quarterly$15,000
GWO: 52-week highs$41.50434$0.49$212.66Quarterly$18,861.64

As you can see, you can get $212.66 per quarter, or $850.64 per year. And with dividends included back at 52-week highs, your portfolio jumps to $18,861.64! That’s total returns of $3,861.64 from your original $15,000 investment on the TSX today.

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 has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

More on Dividend Stocks

The sun sets behind a power source
Dividend Stocks

Forget Canopy Growth: 3 Utility Stocks to Buy Instead

These top Canadian utility stocks look like excellent buys to protect and grow your capital.

Read more »

Target. Stand out from the crowd
Dividend Stocks

1 Dividend Stock Down 30% to Buy Right Now

Keyera is an energy infrastructure company that pays shareholders a forward yield of almost 6%. Is KEY stock a good…

Read more »

oil and natural gas
Dividend Stocks

Suncor Stock Is Rallying: Should You Invest?

Energy stocks like Suncor Energy Inc (TSX:SU) are rising with oil pries.

Read more »

A worker gives a business presentation.
Dividend Stocks

TSX Communications in April 2024: The Best Stocks to Buy Right Now

Here are two of the best TSX communication stocks you can buy in April 2024 and hold for years to…

Read more »

Man considering whether to sell or buy
Dividend Stocks

Royal Bank of Canada Stock: Buy, Sell, or Hold?

Royal Bank of Canada (TSX:RY) has a high dividend yield. Should you buy it?

Read more »

Businessman looking at a red arrow crashing through the floor
Dividend Stocks

BCE’s Stock Price Has Fallen to its 10-Year Low of $44: How Low Can it Go?

BCE stock price has dipped 39% in two years and shows no signs of growth in the next few months.…

Read more »

Dollar symbol and Canadian flag on keyboard
Dividend Stocks

Invest $10,000 in This Dividend Stock for $3,974.80 in Passive Income

This dividend stock gives you far more passive income than just from dividends alone, so consider it if you want…

Read more »

Payday ringed on a calendar
Dividend Stocks

This 6% Dividend Stock Pays Cash Every Month

Can a 6% dividend yield help you build a monthly retirement income? An investment made right can help you build…

Read more »