The S&P/TSX Composite Index was down 67 points in mid-afternoon trading on Monday, August 21. Canadian markets have entered a choppy period, as investors are digesting some less-than-stellar economic news that has trickled out in recent weeks. Some investors might want to pursue passive income in this environment.
Today, I want to target Northwest Healthcare REIT (TSX:NWH.UN) and explore how this top dividend stock can help you churn out big monthly passive income. Let’s jump in.
Canadians: Here’s how you can generate passive income in 2023 and beyond
There are many ways to generate passive income in Canada. However, this is a highly coveted form of income generation for a reason. Typically, it requires a large time or money commitment to get the ball rolling. For example, you can generate rental income through real estate. Or you can gobble up passive income by publishing a book or starting up an online retail store.
Investing in a monthly dividend stock in a Tax-Free Savings Account (TFSA) allows you to set it and forget it for passive income. Better yet, the income you generate is entirely tax free!
How has this dividend stock performed over the past year?
Shares of Northwest REIT were down 2.79% in mid-afternoon trading on August 21. This stock has seen its value more than halve in the year-over-year period at the time of this writing. Investors can see more of its recent performance with the interactive price chart below.
Northwest Healthcare REIT can deliver huge passive income over the long haul!
This real estate investment trust (REIT) released its second quarter (Q2) fiscal 2023 earnings on August 11. Northwest Healthcare delivered revenue growth of 12% to $126 million. Meanwhile, same-property net operating income (NOI) posted 5.1% growth, and it reported strong portfolio occupancy of 96%. Total assets under management (AUM) increased 1% year over year to $10.3 billion. However, net asset value (NAV) per unit dropped 4.6% to $12.55.
Northwest also provided other updates regarding its business going forward. Its United Kingdom portfolio has continued to exceed expectations. The positive performance of U.K. hospitals has spurred the REIT to pursue additional opportunities in Britain. Meanwhile, the REIT is in the process of reacting to changing global interest rates. The company has maintained discipline with its balance sheet and remains in a very solid position going forward.
On August 15, the dividend stock announced a monthly distribution of $0.067 per share. That represents a monster 12% yield.
Northwest Healthcare REIT was trading at $6.22 per share at the time of this writing. For our hypothetical, I’d look to snatch up 1,600 shares for a purchase price of $9,952. This investment means we will be able to generate monthly passive income of $107.20 in our TFSA going forward.
Bottom line
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY |
| NWH.UN | $6.22 | 1,600 | $0.067 | $107.20 | Monthly |
Our hypothetical investment in this dividend stock will also allow us to churn out annual passive income of $1,286.40 in our TFSA. That is a solid payout for an investment of less than $10,000.
