A passive income portfolio could be a saviour during the next year. After all, we’re heading towards a recession that economists predict should be here by mid-2023. That means what we’re seeing now isn’t anywhere near where share prices could fall.
For proof, look to the past if you want a hint of the future. During the last two recessions, we saw that market drop by around 40%. As of writing, the TSX today is only down by about 11% from 52-week highs. And even at its lowest point, it was only down by close to 20%.
With that in mind, it’s time to start preparing. Create some cash flow by investing in dividend stocks and creating a passive income portfolio. If this sounds like something you’d be interested in, here are four to get you started.
Slate Grocery REIT
There are some dividend stocks out there trading downwards simply because they’re in the wrong sector. Real estate investment trusts (REIT) are an example, and Slate Grocery REIT (TSX: SGR.UN) is one of the companies down when it shouldn’t be.
The company maintains a strong occupancy rate and continues to expand, acquiring more grocery chains across the United States. Further, it has proven that grocery stores are a smart investment. We need to eat, and therefore these will be around no matter what the future holds.
Slate stock is also one of the dividend stocks trading at a valuable 4.7 times earnings, and now has a dividend yield at 8.85%. So it’s a great time to pick up the stock for some passive income.
Canadian Tire
Another company that has proven to be strong in the last three years is Canadian Tire (TSX: CTC.A). This retail story has been a bit of a pleasant surprise. The retail company has proven that Canadians will continue to come back for their necessary needs at a good price. This was true even during the pandemic when the company expanded its business through ecommerce offerings.
This alone was a substantial boost, but then the company went further. It was one of the few dividend stocks out there to continue seeing cash flow rising during supply chain disruptions. This is because the company has warehouses on location to store goods, keeping products available pretty much at all times.
Trading at just 9.5 times earnings and with a dividend yield at 4.19%, it’s a great time to pick up Canadian Tire stock as well for your passive income portfolio.
Restaurant Brands
Speaking of the pandemic, we saw Restaurant Brands International (TSX: QSR) drop into oblivion during that time. With no customers coming in, how was it going to survive? Well, it’s gone on to both survive and thrive, bringing in even more cash as the company found ways of offering delivery and curbside service.
This has continued, along with new product offerings as pandemic restrictions are easing off and bringing customers back. So while shares dropped off, they’re coming right back with shares of the passive income stock actually up by 20% in the last year alone!
So, you may actually see some positive movement continue from dividend stocks like this one, while also being able to bring in a dividend yield of 3.45%.
NorthWest REIT
Finally, if you’re looking for a passive income portfolio that’s set up to get you through this rough year, I would consider NorthWest Healthcare Properties REIT (TSX:NWH.UN) a buy as well. It’s one of the dividend stocks that remains incredibly valuable given its future outlook. Yet, it trades down about 38% in the last year! Again, simply from being in the real estate sector.
NorthWest stock continues to show signs of strength, with a 97% occupancy rate as of writing, and an average 14-year lease agreement. That’s basically unheard of, but comes from investing in healthcare properties around the world. This includes hospitals, offices, you name it. And is why the company can continue to dish out dividends.
Shares remain a steal trading at 7.6 times earnings, with a yield at 9.07% as of writing. So definitely consider this one as well if you want a strong passive income portfolio to get you through 2023.
