Despite starting 2023 on a promising note, the Canadian stock market has been on a downward trajectory lately due mainly to growing macroeconomic challenges and the possibility of a looming recession. After posting 3.7% gains in the first quarter, the TSX benchmark has lost 3.4% of its value in the second quarter so far, trimming its year-to-date gains to just 0.2%.
To protect your TFSA (Tax-Free Savings Account) portfolio from ongoing economic uncertainties, you can add some quality Canadian dividend stocks to it. As dividend-paying companies tend to be fundamentally more stable than most others, you can expect healthy capital gains on your investments in the long run besides dividend income. In this article, I’ll highlight one of the best Canadian monthly dividend stocks you can add to your TFSA portfolio today to start earning $100 per month in passive income.
One of the best dividend stocks for TFSA investors
While the recent market turmoil has hit high-flying tech stocks the most, it has also driven some quality Canadian dividend stocks downward, giving investors an opportunity to buy them at a bargain. Sienna Senior Living (TSX: SIA) could be a good example of such beaten-down stocks that I find attractive to buy now.
This Markham-based company currently has a market cap of $811.2 million, as its stock trades at $11.09 per share after witnessing about 10% value erosion in the last four months. During the same period, the main TSX benchmark lost about 3.8% of its value.
At the current market price, Sienna Senior Living offers an impressive 8.4% annualized dividend yield and distributes its dividend payouts every month. Now, let me quickly highlight some key factors that make it a great dividend stock to earn passive income for years to come.
Strong long-term growth outlook
Two of the most important factors that make Sienna a great monthly dividend stock for income investors are its stable business model and consistently growing demand for its services. The company primarily focuses on providing a variety of living options to seniors across Canada, including assisted living, long-term care, and independent living. Besides managing 11 third-party residences, it owned and operated 43 long-term-care communities and 39 retirement residences at the end of the March 2023 quarter.
As the seniors’ population in Canada (in the +85 age group) is expected to triple in the next 25 years, you can expect the demand for Sienna’s services to strengthen in the long run, which should help its financial growth trends improve significantly.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY |
| Sienna Senior Living | $11.09 | 1,282 | $0.078 | $100 | Monthly |
| Prices as of June 23, 2023 |
Bottom line
If you want to make $100 in monthly passive income from its dividends, you’ll need to buy about 1,282 shares of Sienna Senior Living right now. To buy these many shares at the current market price, you’ll have to invest about $14,217. While this example should give you a fair idea of how you can start earning tax-free, monthly passive income by adding quality dividend stocks to your TFSA portfolio, you should always aim to diversify your portfolio instead of investing a big sum of money in just one or two stocks.
