If you’re an investor wanting cash right away and don’t have the time or patience to wait, there are certainly many dividend stocks out there that offer income each month. Yet of all them, today, I’m going to focus on dividend stock Timbercreek Financial (TSX:TF), which is currently offering a dividend yield at 8.58%.
Why Timbercreek?
There are many points to consider when looking to investments for passive income. Yet one of the most important if you’re looking for monthly cash flow is whether that cash flow can be maintained.
In the case of Timbercreek stock, while the company may sound like it has an enormous dividend yield, it really comes to just $0.69 per share annually. So, why is the yield still so high? This is because shares haven’t been doing so well.
Timbercreek stock is in the financial sector. This sector doesn’t tend to do well during recessions and bear markets, as interest rates and inflation way on loan originations. So, why would I recommend it?
Timbercreek stock focuses on mortgage investment opportunities. It invests in shorter-duration solutions, with a focus on commercial real estate. These are income-producing properties that include multi-residential, retail and offices mainly in urban areas.
It’s that focus on income-producing properties that investors should focus in on. These already provide growth opportunities but are likely to have even more in the years to come. When the market recovers, we’re due for a housing boom after a housing bust. And that will lead to more opportunities for Timbercreek stock.
Lock in value
While Timbercreek stock is down for now then, it offers long-term growth for investors. And you don’t have to be that patient, especially when there is passive income to consider. It’s also a steal right now, trading at 12.04 times earnings, and shares are down 15% in the last year.
The question then becomes, how much cash do you want to bring in right away? Given that the numbers are actually quite low, it could take quite a large investment if you hope to create major cash flow through passive income. However, this dividend stock will then likely add on returns from share growth as well.
In the chart below, you can see the amount of passive income you can bring in this year through dividends. However, you can also see what those shares could turn into should shares hit 52-week highs once more from a $10,000 investment.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | ANNUAL PAYOUT | FREQUENCY | TOTAL PORTFOLIO |
| TF: Now | $8 | 1,250 | $0.69 | $862.50 | Monthly | $10,000 |
| TF: Highs | $9.65 | 1,250 | $0.69 | $862.50 | Monthly | $12,925 |
As you can see, this total includes both returns and passive income from dividends. You’ll then have a total portfolio at almost $13,000!
Bottom line
Nothing is guaranteed in this world, and I don’t have a crystal ball that will tell me what the future holds for Timbercreek stock. However, it has strong investments and a good chance that it will return to 52-week highs in 2023. Therefore, you can lock in some strong passive income while you wait. That income will come to a total of $862.50 per year, or $71.88 each month.
