Canadian consumers have been squeezed hard since the broader economy began to open after the COVID-19 vaccination drive. Inflation rates picked up steam at an astonishing pace in late 2021 and the first months of 2022. This spurred the Bank of Canada (BoC) to pursue its most aggressive interest rate-tightening cycle in this young century. That has had a limited impact on inflation, which means Canadian consumers are being hit on many sides.
If you have cash to invest, it might be a great idea to establish a passive-income stream to provide some much-needed support. Today, I want to discuss how Canadian investors can turn $30,000 into $192 every month. Better yet, we’ll invest this hypothetical cash in our Tax-Free Savings Account (TFSA) so that income is entirely tax free.
Here’s an undervalued REIT to target in your passive-income portfolio
Artis REIT (TSX:AX.UN) is a Winnipeg-based real estate investment trust (REIT). It aims to produce stable cash distributions by investing in high-quality retail, commercial, and industrial properties in primary and growing secondary domestic markets. Shares of this REIT have dropped 5% month over month as of close on April 18. The stock is down 20% in the year-to-date period.
This REIT released its full-year fiscal 2022 results on February 28, 2023. The company reported funds from operations (FFO) per unit of $1.39 in fiscal 2022 — up from $1.34 for the full year in fiscal 2021. Meanwhile, it posted same-property net operating income (NOI) of 1.8%.
Shares of Artis REIT closed at $7.22 on Friday, April 18. For our hypothetical, we can snatch up 1,385 shares of this REIT for a purchase price of $9,999.70. This REIT offers a monthly dividend of $0.05 per share. That represents a monster 8.3% yield. The investment means we can generate tax-free passive income of $69.25 going forward.
Demographic transformation is powering this high-yield dividend stock
Extendicare (TSX:EXE) is a Markham-based company that provides care and services for seniors in Canada. This TSX stock has climbed 4.6% month over month as of close on April 18. Its shares are down marginally in the year-to-date period.
In the fourth quarter (Q4) of 2022, this company reported that its average long-term-care (LTC) occupancy improved by 100 basis points (bps) to 94.5%. Meanwhile, home health care average daily volumes (ADV) rose 2% from Q3 fiscal 2022. For the full year, Extendicare delivered revenue growth of 4.7% to $1.22 billion. This was powered by LTC flow-through funding enhancements and healthcare billing rate growth.
This stock closed at $6.47 on April 18. That means we can purchase 1,545 shares of this TSX stock for a total of $9,996.15. Extendicare currently offers a monthly distribution of $0.04 per share, which represents a tasty 7.4% yield. This investment will allow us to make monthly passive income of $61.80.
One more passive-income beast to snatch up today
Keg Royalties Income Fund (TSX:KEG.UN) is the third and final dividend stock I’d look to snatch up to generate passive income this spring and beyond. This Vancouver-based company operates as an unincorporated, open-ended, limited purpose trust. Its shares have dipped 1.6% over the past month. That has pushed the stock into negative territory so far in 2023.
This income fund closed at $15.57 per share on Friday, April 18. For our final purchase, we can snag 642 shares of the Keg Royalties Income Fund for a grand total of $9,995.94. This income fund currently offers a monthly dividend of $0.095 per share, representing a very strong 7.2% yield. The investment will let us generate passive income of $60.99 per month.
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Canadian investors hungry for passive income can turn $30,000 into a tax-free monthly payout of $192.04 in the months ahead.