1 Under-$10 Dividend Stock to Buy for Monthly Passive Income

This dividend stock is new on the market, which is why investors may be ignoring its long-term potential, especially for monthly passive income.

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Canadians continue to seek out at least one solid dividend stock that can help them through this downturn. Whether it’s a long or short-term hold, what you want most of all is security. Knowing that your dividend stock is going to pay you, and you don’t want to pay much for it.

That’s why today I’m going to look at one dividend stock under $10 that you can buy right now. It will offer you monthly passive income and remains a safe and stable buy on the TSX today.

Nexus REIT

Let’s first get into the fundamentals of Nexus Industrial REIT (TSX:NXR.UN). Shares of the dividend stock are down about 26% in the last year at the time of writing. It trades at a valuable 5.4 times earnings and 0.76 times book value.

For its dividend, it holds a 6.59% dividend yield at the time of writing as well. The dividend stock has a payout ratio at 35.65% as well, so it can certainly be funded. Shares also trade at just $9.75 as of writing as well.

So, what’s the bad news? This real estate investment trust (REIT) is quite new. It came on the market during the upswing of 2021 and climbed upwards before falling back during the economic downturn. So, it has yet to prove that it can make it through a recession. However, let’s look at why investors may still want to consider this dividend stock for monthly passive income.

Stable growth

While it has a long way to go, Nexus REIT has identified stable areas when looking for growth. The dividend stock focuses on Canadian properties, looking for growth-oriented real estate. It will do this through the acquisition, ownership, and management of retail, office, and industrial properties.

You’ll notice that residential spaces are missing here, and that’s key. The housing market, including apartments and condominiums, is just not where investors want to be right now. It’s quite expensive to live in Canada, and we continue to go through a housing crisis. Until there is some sign of a turnaround, it might be best to stay out of it.

That’s why Nexus REIT is such a strong choice. There are certainly growing areas in retail and office, but industrial is a huge win. There is major demand for warehouse and assembly properties in Canada, so if you want growth, which Nexus REIT does, then I would certainly consider this a win for the stock.

How much you could make

Let’s say that you have $5,000 to put towards Nexus REIT right now. Let’s look at two things here: how much you could make in monthly and annual passive income and how much you could achieve in returns should it return to 52-week highs.

Here is what that would look like.

NXR.UN – Now$9.75513$0.64$328.32Monthly$5,000
NXR.UN – Highs$13.39513$0.64$328.32Monthly$6,869.07

If you see shares rise just to 52-week highs, then you could have returns of $1,869.07! And while you wait you can bring in $328.32 annually, or $27.36 each and every month.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends Nexus Industrial REIT. The Motley Fool has a disclosure policy.

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