Canadians have been faced with rising expenses since the end of the COVID-19 pandemic. Inflation soared in late 2021 and the first half of 2022, spurring the Bank of Canada (BoC) to pursue its most aggressive interest rate-tightening policy in over 15 years.
This week, the BoC hiked the benchmark interest rate to 5%. That is the highest benchmark rate Canadians have lived with since the early 2000s. Today, I want to discuss how Canadians could look to churn out $1,500/month in passive income this year. How much will we need to commit to reach that lofty goal? Let’s jump in and target the perfect dividend stocks to make it happen.
According to a 2018 Statistics Canada survey, the average Canadian citizen in the 45-54 age range possesses total average savings of $564,600. Canadians in the 35-44 age range possess an average of $274,100. This includes savings in retirement savings accounts, TFSAs, and cash accounts. For this hypothetical, we are going to target $200,000 to make our aggressive passive income drive.
Here’s an undervalued REIT with a super monthly dividend yield
Northwest Healthcare REIT (TSX:NWH.UN) is a Toronto-based real estate investment trust (REIT) that owns and operates a global portfolio of high-quality healthcare real estate. Shares of this monthly dividend stock jumped 1.72% in the trading session on Wednesday, July 12. The stock has dropped significantly in the year-over-year period at the time of this writing.
Shares of this REIT closed at $6.49 per share on Wednesday, July 12. For our hypothetical, we can snatch up 10,800 shares of Northwest for a purchase price of $70,092. The REIT offers a monthly dividend of $0.067 per share. That represents a monster 12% yield. We can now generate monthly passive income of $723.60 going forward.
This dividend stock will help us reach our lofty passive-income goal
Extendicare (TSX: EXE) is a Markham-based company that provides care and services for seniors in Canada. This dividend stock has climbed marginally month over month as of close on July 12. Its shares are up 14% in the year-to-date period. Investors can see more of its recent performance with the interactive price chart below.
This dividend stock closed at $7.47 per share on July 12. We can purchase 8,000 shares of Extendicare for a total price of $59,760. Extendicare last paid out a monthly distribution of $0.04 per share, which represents a tasty 6.4% yield. That purchase means we can churn out monthly passive income of $320 from here on out.
One more monthly dividend stock I’d target to help build big passive income
Allied Properties REIT (TSX: AP.UN) is the third dividend stock and the second REIT I’d target for its passive income. Shares of this REIT rose 1.40% on July 12. This stock is also down sharply in the year-over-year period.
The REIT closed at $21.62 on Wednesday, July 12. For our final purchase, we can acquire 3,244 shares of Allied Properties REIT for $70,135.28. This REIT currently offers a monthly dividend of $0.15 per share, representing a great 8.3% yield. That investment means we can generate monthly passive income of $486.60 going forward.
Conclusion
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY |
| NWH.UN | $6.49 | 10,800 | $0.067 | $723.60 | Monthly |
| EXE | $7.47 | 8,000 | $0.04 | $320 | Monthly |
| AP.UN | $21.62 | 3,244 | $0.15 | $486.60 | Monthly |
These investments in top dividend stocks will allow us to churn out monthly passive income of $1,530.20. That works out to annual passive income of $18,362.40. While the investment is substantial, that annual income will go a long way to aiding in any increase in expenses you might experience in the current environment.
