RRSP Investors: 3 Stocks for Decades of Passive Income

RRSP investors can look to churn out huge passive income for the long term with stocks like TransAlta Renewables Inc. (TSX:RNW) right now.

Ambrose O'Callaghan

Ambrose O'Callaghan graduated with a BA in Political Science from McMaster University. After that, he jumped into the banking world. He worked from the front line to an investment associate role. After that, he found a way to marry his experience and knowledge in the world of banking and finance to his love and passion for writing. Ambrose is a passionate believer in Warren Buffett's value investing model.

Published March 15, 2023 2:00 pm EDT

The Registered Retirement Savings Plan (RRSP) is a registered account that has serviced Canadian investors since all the way back in 1957. Many younger investors have favoured the Tax-Free Savings Account (TFSA), which launched in 2009, for its flexibility in a mostly friendly market over the past 15 years.

However, the RRSP is an extremely useful account for investors of all ages. Investing in an RRSP provides you an immediate tax benefit. Moreover, like the TFSA, your capital gains and income generated in the RRSP are entirely tax free. Today, I want to target three stocks that can provide decades of passive income in your RRSP portfolio.

Let’s jump in.

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Why Freehold is a perfect passive-income vehicle for your RRSP

Freehold Royalties (TSX: FRU) is the first stock I’d look to grab for our RRSP in the middle of March. This stock is designed to deliver consistent and hefty passive income to its shareholders. The Calgary-based company is engaged in acquiring and managing royalty interest in the crude oil, natural gas, natural gas liquids, and potash properties in Western Canada and the United States. Its shares have climbed 2.9% year over year as of close on March 14.

This company unveiled its fourth-quarter and full-year fiscal 2022 results on March 1, 2023. Funds from operations (FFO) climbed 67% year over year to $316 million. Moreover, FFO per basic share rose 51% to $2.10. Meanwhile, total production in barrels of oil equivalent per day (boe/d) increased 19% to 14,101.

Shares of this energy stock possess a favourable price-to-earnings (P/E) ratio of 10. RRSP investors can depend on its monthly dividend of $0.09 per share. That represents a monster 7.3% yield. This is a perfect passive-income stock to stash in your RRSP right now.

Here’s another stock to stash in your RRSP for the long term

RRSP investors who are hungry for exposure to the green energy space should consider TransAlta Renewables (TSX: RNW). This Calgary-based company owns, develops, and operates renewable and natural gas power-generation facilities and other infrastructure assets in Canada, the United States, and Australia. Its shares have jumped 5.1% so far in 2023.

Investors got to see TransAlta’s final batch of fiscal 2022 earnings on February 16. TransAlta reported total revenues of $2.97 billion in fiscal 2022 — up from $2.72 billion in fiscal 2021. Meanwhile, FFO per share rose to $4.97 compared to $3.67 in the previous year.

This stock currently offers a monthly distribution of $0.078 per share, which represents a fantastic 7.8% yield. RRSP investors can gorge on its passive income for the long haul.

This REIT also offers consistent passive income

Slate Grocery REIT (TSX: SGR.UN) is the third passive-income stock I’d look to add to an RRSP today. This Toronto-based real estate investment trust (REIT) owns and operates grocery retailers in the United States. Shares of Slate Grocery have dropped 11% year over year.

In the fourth quarter of 2022, this REIT posted rental revenue growth of 32% to $50.6 million. Meanwhile, adjusted funds from operations jumped 3.9% to $13.7 million. This REIT offers monthly passive income of $0.072 per share, representing an incredible 8.2% yield.