Want $10 in Monthly Passive Income? Buy 100 Shares of This TSX Stock

Are you interested in generating monthly passive income? Here’s what buying shares of Northland Power can do for you.

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Many investors dream of having their portfolios pay for their everyday expenses. That’s what is referred to in the financial space as achieving financial independence. Doing so could allow investors to leave their jobs and spend more time doing things they’re passionate about.

However, unless you’re already very wealthy, it’ll, unfortunately, be impossible to reach financial independence overnight. For the vast majority of investors, financial independence will be a long journey. It’ll take discipline and consistency to slowly build up a large source of passive income. For completely new investors, even generating a passive income of $10 a month can be a great start.

In this article, I’ll discuss one stock that could kick start your journey to financial independence.

Which stock should you buy for monthly income?

Investors interested in monthly income should consider buying shares of Northland Power (TSX:NPI). For those that are unfamiliar, Northland Power is a utility company with a portfolio of assets capable of generating three gigawatts (GW) of power. That portfolio size suggests that it’s much smaller than the larger players in this space, but Northland Power has continued to grow its portfolio at a steady rate over the years. I believe it’ll continue to grow strongly in the coming years. Northland Power currently has 14 GW of generation capacity at various stages of development.

Looking at its dividend, investors may note that the company pays out $0.10 per share on a monthly basis. That means, in order to generate $10 of passive income per month, investors would need to buy 100 shares of Northland Power stock. Fortunately, that’s a fairly achievable task for many. As of this writing, Northland Power stock is valued at $32.58. Buying 100 shares would then cost investors $3,258. That’s just about half of what Canadians were given in terms of contribution room in their TFSAs in 2023.

StockPrice per shareMonthly dividend per shareNumber of shares boughtTotal costTotal monthly dividend
Northland Power (TSX:NPI)$32.58$0.10100$3,258$10
Values as of March 1, 2023.

Why is Northland Power an interesting company?

First and foremost, this stock should interest investors for its aforementioned monthly dividend. It should be noted that Northland Power’s dividend hasn’t been cut or suspended since it was first introduced in 2023. However, investors should note that the company doesn’t tend to increase its dividend very often. Its last dividend raise was back in 2017, six years ago as of this writing.

Aside from its reliable monthly dividend, Northland Power shines as a potential star in the utility industry. Its portfolio is highly diversified, with four types of facilities on its books. Of those, offshore wind represents the largest portion of its portfolio (46%). Northland Power’s portfolio is also diversified in terms of location. With facilities in North and South America, Asia, and Europe, Northland Power shouldn’t experience any major catastrophes if one region were to be hit by tough economic times.

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 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.

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