3 Cheap TSX Stocks to Buy for Passive Income

Are you interested in generating passive income? Here are three cheaper stocks to consider!

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Generating passive income can help investors live more comfortable lives. In doing so, investors can supplement or even replace the income they generate from their work. That can allow an investor to spend time doing things they’re more passionate about whether it be traveling, be with family, pick up a new hobby, or maybe even start a business.

One thing that stops many people from becoming passive-income investors is the notion that dividend investing is expensive. However, it doesn’t have to be. There are many strong companies that trade under $100.

In this article, I’ll discuss three stocks that fit that bill. I believe all three of these companies belong in a passive-income portfolio.

This is a massive company

Canadians should be very familiar with Telus (TSX:T). In fact, it’s the third-largest telecom company in Canada in terms of customers served. In terms of network size, Telus comes in at number one in the country. Its network coverage area accounts for 99% of the Canadian population. Despite already playing such an important role in the Canadian telecom space, Telus refuses to sit back. It has continued to explore now spaces and now even offers a telehealth platform.

As of this writing, Telus stock appears very affordable, trading at about $27 per share. Aside from its cheaper stock price, Telus should be very attractive because of its high dividend yield (5.18%). Although investors shouldn’t buy stocks strictly for a high dividend yield, when it’s a reliable company like Telus that offers that yield, investors would be silly to not even consider adding this stock to their portfolio.

Buy this grocery stock

Dividend investors should also consider buying shares of Metro (TSX:MRU) stock today. This is one of the largest grocery companies in Canada, with 975 locations across Ontario, Quebec, and New Brunswick. What impressed me regarding Metro stock is that the company managed to post impressive financials in 2022, despite the tough economic environment.

Regarding its dividend, Metro appears as one of the best options in Canada. The company has managed to increase its dividend distribution for nearly two decades. With shares trading around $70, this is definitely the most expensive stock in this article. However, it still sits under that $100 limit and comes with many attractive points for investors to consider.

Take advantage of this recent spin off

The Brookfield name is very well known among Canadian investors. However, what many investors may not know is that Brookfield recently spun out its asset management business into a separate entity. The company’s reason for doing so is that it thinks investors will value the sum of its parts more highly if they each trade on their own. A consequence of the spin off is that the price of a single share of Brookfield stock is now lower. With the parent company now trading as Brookfield Corporation (TSX:BN), investors can buy shares for less than $34.

It should be noted that Brookfield Corporation’s forward dividend yield is quite low (1.47%). However, with the management team that it has backing it, I’m very confident that Brookfield Corporation shareholders will have little to worry about over the coming decade.

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 Jed Lloren has positions in Brookfield. The Motley Fool recommends Brookfield, Brookfield Corporation, and TELUS. The Motley Fool has a disclosure policy.

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