I want investors to forget about how the market is performing right now. No, really. I don’t want you to think about how it’s performing at all. Because today, we’re going to focus on passive income in Canada.
If you want passive income, certainly you want to buy some stocks at a good price. However, you should also go in with the goal of holding those investments for years, perhaps decades! In that case, it doesn’t really matter what the share price is.
Why? Because over time the market trends upwards. So as long as you’re choosing stocks that have been around for decades, and are bound to continue for decades more, you can create passive income that lasts. No matter the price.
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BMO stock
If you want passive income that lasts, then choose one of the Big Six Banks. Right now, I would recommend Bank of Montreal (TSX: BMO) for a few reasons. First off, it’s the oldest of the banks, around for about 200 years! So you can be sure it’s not going anywhere.
That’s especially true as the bank continues to expand, now setting up shop in the United States with its purchase of Bank of the West. This will bring in even more revenue and keep it growing strong.
Right now, you can pick up BMO stock with a dividend of $5.72 per share handed out annually. Shares have climbed 228% in the last decade as well, offering a compound annual growth rate (CAGR) of 12.6%.
Canadian Utilities
If you want a dividend to last, choose the only Dividend King on the market. That’s Canadian Utilities (TSX: CU), which has been increasing its dividend each year for 50 years! That’s quite literally more than any other stock out there, though some are catching up.
Even so, given that the passive income stock is in the solid utilities sector, it’s unlikely to be going anywhere any time soon. Especially as earnings regularly beat out analyst estimates, and the future continues to move towards renewable energy.
CU stock currently offers a dividend of $1.79 per share annually. Over the last decade, those shares have risen by 46%, which gives it a CAGR of 3.86%. And that’s not nothing.
Brookfield Renewable
Another strong choice to consider for future passive income is energy. But don’t just choose any energy stock. Currently, we’re going through a transition, so you want exposure to every possible source of renewable energy resource. Which is why I would go with Brookfield Renewable Partners LP (TSX: BEP.UN).
Brookfield stock invests in just about everything, creating partnerships with uranium producers, and setting up onshore and offshore wind farms, as well as everything in between. It’s bound for greatness for those willing to wait, and offers passive income while you do.
You can get an annual dividend of $1.79 per share right now, with shares up 285% in the last decade. That’s a CAGR of 14.4%! Even with a recent downturn.
Bottom line
Let’s say you were to put $15,000 towards each of these stocks today. Let’s see exactly what that could bring in annually, and on a daily basis.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | DAILY PAYOUT | TOTAL INVESTMENT |
| BMO | $137 | 109 | $5.72 | $623.48 | quarterly | $1.71 | $15,000 |
| CU | $36 | 417 | $1.79 | $746.43 | quarterly | $2.05 | $15,000 |
| BEP.UN | $37 | 405 | $1.79 | $725.67 | quarterly | $2 | $15,000 |
As you can see, altogether, you could be bringing in $5.76 per day in passive income.
