For a Shot at $7,000 in Annual Passive Income, Buy 8,750 Shares of This TSX Stock

Northwest Healthcare REIT (TSX:NWH.UN) is a TSX stock that can help readers achieve their passive-income dreams in 2023.

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Passive income is unearned income that requires minimal or no labour to earn and/or maintain. The creation of a consistent and strong passive-income stream is a huge milestone for any investor. Today, I want to discuss how you can generate a whopping $7,000 in annual passive income by snatching up shares of Northwest Healthcare REIT (TSX:NWH.UN). This is a TSX stock that should be on your radar if you are on the hunt for big dividends. Let’s jump in.

Canadians: Here’s why you should shoot for five figures in annual passive income

Investors who have built a large nest egg are more capable of building a passive-income portfolio that can legitimately sustain them over a long period of time. This may conjure up thoughts of the old cliché: you need money to make money. In this case, that is accurate. Fortunately, you can put your money to work when you pursue passive income.

Life has grown more expensive for everyday Canadians. Investors should be keen on the opportunity to churn out extra income on an annual basis. Annual income of $7,000 should be more than enough to put a big dent in your yearly liabilities.

How has this REIT performed over the past year?

Northwest Healthcare REIT is a real estate investment trust (REIT) that owns and operates a global portfolio of high-quality healthcare real estate. This REIT was a fantastic performer during the COVID-19 pandemic. Investors should not ignore it in the aftermath of the health crisis. Aging demographics across the developed world are increasing demand for healthcare services and facilities.

Shares of this REIT have declined 28% year over year as of close on February 24. Meanwhile, this TSX stock has jumped 2.9% so far in 2023. Investors can look deeper at its recent performance with the interactive price chart below.

Investors can expect to see Northwest Healthcare’s fourth-quarter and full-year fiscal 2022 earnings on March 31, 2023. In Q3 2022, the REIT achieved revenue growth of 21% to $115 million. Meanwhile, it posted same-property net operating income (NOI) growth of 2.5%. Total assets under management (AUM) increased 24% year over year to $10.6 billion. Net asset value (NAV) per unit also climbed 2.7% to $13.97.

Here’s how you can generate $7,000 in annual passive income…

Readers who are hungry for big annual passive income should look hard at Northwest Healthcare REIT. The REIT currently offers a monthly dividend of $0.067 per share. That represents a monster 8.2% yield.

Northwest Healthcare REIT closed at $9.76 on Friday, February 24. Generating $7,000 in annual passive income is worth celebrating. Do you know what is even better? If that $7,000 is entirely tax free. The annual contribution room in a Tax-Free Savings Account (TFSA) stands at $88,000 in 2023. We can snatch up 8,750 shares of Northwest REIT for a purchase price of $85,400.

As a sidenote, it is worth mentioning that the vast majority of investors should not be throwing all their weight in a TFSA or any account behind one individual stock. Whether you are growth or income oriented as an investor, you should seek to diversify in order to minimize risk in your portfolio. This scenario just provides an example of how much annual passive income you can generate by following this strategy.

This investment will allow us to generate tax-free passive income of $586.25 on a monthly basis. That works out to an annual payout of $7,035.


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 Ambrose O'Callaghan has no position in any of the stocks mentioned. The Motley Fool recommends NorthWest Healthcare Properties Real Estate Investment Trust. The Motley Fool has a disclosure policy.

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