The ongoing macroeconomic uncertainties and challenging market environment are keeping investors on edge, as their hard-earned money seems to be declining on paper. Such turbulent markets act as a stark reminder that you must focus on a long-term investing approach instead of attempting to navigate short-term fluctuations and market volatility. Also, adding some quality dividend stocks to your TFSA (Tax-Free Savings Account) can help you minimize risks further as they can help you create a reliable source of tax-free passive income, irrespective of short-term economic cycles.
In this article, I’ll highlight one such monthly dividend stock you can buy on the TSX today to expect $60 in tax-free passive income each month. Before I give you the math for that, let’s take a closer look at what makes this stock worth considering now.
One of the best TSX monthly dividend stocks to buy today
Besides looking at a stock’s dividend-growth track record, you shouldn’t forget to carefully analyze its long-term financial growth potential when picking a monthly dividend stock to invest in. This is because only a company with a strong fundamental outlook can continue rewarding investors with increasing dividends, even in difficult economic environments.
Speaking of strong fundamentals, Mullen Group (TSX:MTL) could be an attractive TSX dividend stock to consider today. If you don’t know about it already, it’s an Okotoks-headquartered group that primarily focuses on acquiring small logistics and warehousing companies with an aim to improve their operational and financial performance. The group currently has a market cap of $1.2 billion, as its stock trades at $13.97 per share after witnessing 4% value erosion so far in 2023.
At this market price, Mullen offers an attractive 5.2% annualized dividend yield and distributes its dividend payouts every month.
Top reasons to buy this stock now
The underlying strength in MTL’s fundamentals and its ability to continue performing financially well, even in difficult economic environments, are two important factors that make MTL a great Canadian monthly dividend stock to hold in TFSA for the long term. Although a recent weakness in the demand for freight services has kept its revenue nearly flat on a YoY (year-over-year) basis in the first three quarters of 2023, its adjusted earnings during the same nine months jumped 15.2% YoY to $1.14 per share.
As inventory levels are back in balance with gradually aligning supply and demand of goods, Mullen expects that freight service demand could stabilize soon, which can help its financial growth trends improve in the coming quarters. Moreover, Mullen’s consistent focus on new quality acquisition opportunities, even amid the ongoing difficult economic environment, makes its business outlook brighter.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY |
| Mullen Group | $13.97 | 1,000 | $0.06 | $60 | Monthly |
| Prices as of October 20, 2023 |
Make $60 a month in tax-free passive income
If you add 1,000 shares of Mullen Group to your TFSA right now, you can expect to earn $60 every month in tax-free passive income from its quality dividends. For that, you’ll need to invest $13,970 in its stock at the current market price. While this example should give you a good idea of how you can create a source of healthy monthly passive income by investing in fundamentally strong dividend stocks, you may want to consider diversifying your stock portfolio and avoid investing a large sum of money in a single stock to keep your risks low.
