How to Build a Bulletproof Passive Income Portfolio With Just $15,000

Dividend earners with limited capital can build a bulletproof passive income portfolio with two quality stocks.

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The challenge for income-thirsty investors in 2023 is making the right choices and building a bulletproof passive income portfolio. For those with budget constraints, you can build one with just $15,000 invested in two quality dividend stocks.

At their current share prices and dividend yields, your money can generate $206.12 in quarterly passive income from Suncor Energy (TSX:SU) and Power Corporation of Canada (TSX:POW). The table below shows the possible scenario (allocation) and potential earnings.

CompanyPriceNo. of SharesDividend per ShareTotal PayoutFrequency
Power Corp.$36.10198$2.10$416.72Quarterly

Your total investment in the example is $15,004.44 with 198 shares in each of Suncor and Power Corporation. The former pays a 5.19% dividend, while the latter’s yield is 5.83%. With the combined annual payout of $824.48, you will receive $206.12 every three months.    

Oil bellwether

Suncor Energy lost its dividend aristocrat status in 2020 when it slashed dividend payments during the height of the oil price slump and low demand. However, the ‘one step backward, two steps forward move’ by the oil bellwether regained investors’ trust and confidence. Today, the dividend yield is higher than three years ago.

The $52.5 billion integrated energy company produces oil from oil sands, owns exploration and production assets, operates four refineries, and invests in renewable fuels. Suncor’s allied business includes Petro Canada, which has a network of over 1,800 retail and wholesale outlets.

According to its CEO, Rich Kruger, expect Suncor to be a simpler and more focused organization. The newly appointed boss said, “My overriding objective for Suncor is to deliver industry-leading performance. I believe we can achieve this by driving clarity and simplification throughout the organization.”  

In Q1 2023, net earnings declined 30.4% to $2.1 billion versus Q1 2022. Management said the drop was primarily due to decreased crude oil realizations, increased operating expenses, lower upstream production and refinery throughput, and weakening crude oil prices. 

Suncor’s game plan is to streamline its portfolio for greater fit and focus. It should also allow the company to allocate resources to its highest-value core assets to maximize shareholder returns. For Kruger, in particular, one of his main tasks is to improve Suncor’s safety record. Market analysts have a high price target of $66 (+66.3%) for the energy stock.

Leading franchises

The $24.1 billion international management and holding company provides financial services to clients in North America, Europe, and Asia. Its core business segments include insurance, investments, retirement, and wealth management, plus alternative asset investment platforms.

Management enhances shareholder value by actively managing operating businesses and investments. Great-West Lifeco (TSX:GWO) and IGM Financial (TSX:IGM), both publicly listed companies, are two of POW’s principal subsidiaries, in which it has 66.6% and 66.2% ownership stakes.

The holding company maintains a long-term perspective and relies on its network and leading franchises to deliver superior returns.  

POW is a dividend aristocrat owing to eight consecutive years of dividend increases and is up 15.1% year to date. Lifeco (+25.9%) and IGM (+5.23%) are likewise outperforming thus far in 2023.

Ideal combo

Suncor Energy and Power Corporation of Canada is an ideal combination for dividend earners building a bulletproof passive income portfolio.

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 Christopher Liew has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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