The Motley Fool definitely recommends investors focus on long-term financial goals. And I would certainly not disagree with that. But sometimes, we just need extra cash, and we need it pretty much immediately. That is why today I’m going to focus on a passive-income stock that can help generate cash flow right now.
Slate REIT
Let’s get right into it with the stock recommendation. I would suggest investors look into Slate Grocery REIT (TSX: SGR.UN), as it’s an excellent option for both short- and long-term investing.
On the short-term side, the company continues to have a healthy balance sheet, allowing it to continue expanding. Slate stock continues to focus this expansion on grocery-anchored real estate chains in the United States. It’s set up shop down south, because there is far more diversification there than here in Canada in terms of grocery chains.
Now, Slate stock currently boasts long-term lease agreements that can be a decade or more in length, which is why it’s a great long-term option as well. That’s a decade or more of solid cash flow, helping the company support growth — but it’s not just dividend growth; it’s business growth as well. As mentioned, the passive-income stock focuses on expanding by purchasing properties for acquisitions as well.
What’s more, Slate stock is in value territory. Shares trade at 6.39 times earnings as of writing, down 14% in the last year and 15% year to date. As for the dividend, the passive-income stock offers a solid 9.31% yield as of writing.
How much you need
How much you want to create in passive income right now depends on how much you can invest. In the short term, it may hurt. Shares could drop further for Slate stock given the market we’re in now. You’ll still achieve that passive income on a monthly basis, but your overall returns may go down.
That being said, Slate stock should bounce back relatively quickly, given its stable cash flow and investments. So, let’s look at three different options for creating passive income from Slate stock: a small, medium, and large investment.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND (ANNUAL) | TOTAL PAYOUT (ANNUAL) | FREQUENCY | MONTHLY INCOME | TOTAL INVESTMENT |
| SGR.UN | $12.91 | 77 | $1.18 | $90.86 | Monthly | $7.58 | $1,000 |
| SGR.UN | $12.91 | 387 | $1.18 | $456.66 | Monthly | $38.06 | $5,000 |
| SGR.UN | $12.91 | 1,549 | $1.18 | $1,827.82 | Monthly | $152.32 | $20,000 |
As you can see, what you give is what you get. You definitely would have to consider how much you can afford and how much you’re hoping to receive while you wait for shares to bounce back. And remember, should shares return to 52-week highs, that’s a bonus as well. You could see a potential upside of 27% as of writing!
Bottom line
If you’re looking for passive income right now, Slate stock is certainly a great one to consider. It offers substantial income as well as the potential for huge returns. And with long-term lease agreements and acquisitions, it should be the passive-income stock that keeps on giving for years to come.
