Timbercreek Financial (TSX:TF) is a Toronto-based mortgage investment company that provides shorter-duration structured financing solutions to commercial real estate investors in Canada. Today, I want to explore how Canadian investors can generate big monthly passive income just by owning shares of this super dividend stock. Let’s jump in.
Here’s how this dividend stock has performed over the past year
Shares of Timbercreek have jumped 3.8% month over month as of close on Tuesday, July 25. Meanwhile, the dividend stock has climbed 4.1% so far in 2023. Its shares are still down 8.1% year over year. Investors can see Timbercreek’s recent and past performances with the interactive price chart below.
Should investors be bullish on Timbercreek’s future?
This company released its first-quarter (Q1) fiscal 2023 earnings on May 8. Timbercreek achieved record quarterly net investment income of $32.7 million — up 44% compared to the previous year. Moreover, it posted record net income and comprehensive income of $18.1 million, which was up nicely from $13.8 million in Q1 2022.
Timbercreek reported net new mortgage fundings of $39.3 million as well as advances on existing mortgages of $12.8 million. Moreover, mortgage repayment activity declined after the run up in Q4 2022. Net mortgage investments were $1.14 billion and possessed interest at an average rate of 9.7%. The company maintained a conservative portfolio risk composition that is focused on income-producing commercial real estate. As it stands right now, its loans are 68.5% weighed average loan to value. Moreover, 92% are first mortgages in its mortgage investment portfolio.
Despite a challenging macroeconomic environment, Timbercreek put together a solid performance in Q1. There are some borrowers that have encountered issues in this climate, but the company has sought to actively manage any loans that may be in crisis.
Shares of this dividend stock currently possess a very favourable price-to-earnings (P/E) ratio of 11. Investors who are chasing passive income should feel good about snatching up shares of Timbercreek at its current value.
This super dividend stock is perfect for a passive-income portfolio
Investors who want to build a quick passive-income portfolio should seek to do so in a Tax-Free Savings Account (TFSA). That way, any income that you accrue going forward will be entirely tax free.
Timbercreek closed at $7.59 per share as of close on Tuesday, July 25. For our passive-income portfolio, we can snatch up 1,725 shares of this dividend stock for a purchase price of $13,092.75. This stock last paid out a monthly distribution of $0.058 per share. That represents a monster 9% yield. The purchase of these shares will allow us to generate monthly passive income of $100.05 going forward.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY |
| TF | $7.59 | 1,725 | $0.058 | $100.05 | Monthly |
Now is a great time to snatch up shares of this cheap monthly dividend stock. Better yet, these investments will allow us to generate annual passive income of $1,200.60 going forward.
