For $800 in Monthly Passive Income, Buy 11,950 Shares of This TSX Stock

We can generate monthly passive income of $800 with a TSX stock like Northwest Healthcare Properties REIT (TSX:NWH.UN).

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 April 12, 2023 5:00 pm EDT

Passive income is defined as a type of unearned income that requires minimal to no labour to generate and maintain. There are many types of passive income: rental income, cash from royalties from a published novel or other creative endeavour, flipping retail products for profit, affiliate marketing; these are all types of passive income.

Today, I want to focus on passive income that will be generated through an investment. We will look to generate $800 in monthly passive income with a TSX stock that offers big income and very nice value at the time of this writing. For this hypothetical, we are going to utilize all our Tax-Free Savings Account (TFSA) room and a little extra in a cash account. Let’s dive in!

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Here’s why Canadian investors should be hungry for passive income right now!

The S&P/TSX Composite Index climbed 146 points on Tuesday, April 11. Some of the top-performing sectors included battery metals, base metals, and energy. The Canadian market has built nice momentum since the final week of March. However, the broader market has still not recouped the losses it incurred during the spring 2022 market pullback.

Despite the recent momentum, I’m still skeptical in this current market. Canadians remain nervous about the state of the economy. Moreover, consumers are under major pressure due to rising interest rates. If a recession does hit the Canadian and United States economies, it will be nice for investors to have consistent passive income to rely on. That is why I’m looking to pounce on a deeply undervalued dividend beast right now.

Why I’m in love with this TSX stock in April 2023

Northwest Healthcare REIT (TSX:NWH.UN) is a Toronto-based real estate investment trust (REIT) that owns and operates a global portfolio of high-quality healthcare real estate. This REIT proved resilient in the face of the COVID-19 pandemic. It has seemingly fallen out of favour over the past year. However, I’m still eager for exposure to the healthcare real estate space.

Shares of this REIT have dropped 12% in 2023 as of close on April 11. This TSX stock has plunged 39% in the year-over-year period.

Should investors be encouraged by Northwest’s recent results?

This REIT released its fourth-quarter and full-year fiscal 2022 earnings on March 31, 2023. Northwest delivered revenue growth of 23% to $118 million. Meanwhile, same-property net operating income increased 2.9% compared to the prior year. Moreover, total assets under management climbed 18% year over year to $10.9 billion.

How to generate $800 in monthly passive income with this TSX stock

Northwest Healthcare REIT closed at $8.31 per share on Tuesday, April 11. For our hypothetical, we will need to purchase 11,950 shares of this TSX stock for a purchase price of $99,304.50. This REIT offers a monthly dividend of $0.067 per share, which represents a monster 9.6% yield. Our 11,950 will allow us to generate monthly passive income of $800.65 going forward.