Passive income has been a major theme here at Motley Fool for quite some time. Granted, it’s clear to see why. The TSX today recently fell to 52-week lows, and that was not received well. However, it looks like, after some strong tech earnings and interest rate halts, there could be a sun on the horizon.
Even so, that means there are some passive-income stocks that are still on sale, but not for long. So, it’s time to get in on them now and create some stellar passive income — income that could come every single month, tax-free.
How come?
The key here is to make sure you have a Tax-Free Savings Account (TFSA). The TFSA is perfect for those looking to create tax-free passive income for life but who may also need the cash down the line. After all, we can make plans, but they don’t always follow through. So, if you suddenly need a new roof, engine, or other emergency, you can take it out at any time.
However, if you don’t need the cash, it will continue to grow and create more and more passive income — especially if you’re using the passive income from dividends to reinvest back into the stock. This is perhaps the easiest and best way to create savings over the long run. You can go from just a few thousand dollars to over a million in just a few decades — all tax free in a TFSA.
Consider this monthly dividend stock
If you want to create passive income to reinvest or keep on hand, there are some strong options on the TSX today. One that I would consider, however, is a downtrodden stock that’s due for a comeback. That would be NorthWest Healthcare Properties REIT (TSX:NWH.UN).
Granted, NWH stock is well-trodden at this point. The company cut its dividend to help as operating costs rose as well as expenses. It needs to pay down debts after years of acquisitions in the healthcare property sector, including a real estate investment trust (REIT) in Australia.
The thing is, the stock is due to recover eventually. That’s because it’s created lease agreements that average around 14 years, as of writing. These properties include hospitals and physician offices, locations that aren’t exactly going to want to deal with a new property owner any time soon.
Get a deal, right now
So, now that you’re considering NWH stock, let’s look at what you could gain, shall we? NWH stock currently trades at a trailing price-to-earnings (P/E) ratio of 7.42, marking it as quite valuable. Shares are down 60% in the last year, putting it far lower than the 52-week high of $11.50.
You can also grab a dividend yield at 7.83% as of writing. While this is about half of what it was before, it’s more manageable. So, you shouldn’t need to fear about further cuts in the future. With that in mind, here is what a $5,000 investment in NWH stock could gain in passive income right now. That includes dividend income as well as returns.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | PORTFOLIO TOTAL |
| NWH – now | $4.50 | 1,111 | $0.36 | $399.96 | monthly | $5,000 |
| NWH – highs | $11.50 | 1,111 | $0.36 | $399.96 | monthly | $12,776.50 |
As you can see, you could gain $7,776.50 in returns and $399.96 in dividend income! What’s more, you’ll make $33.33 per month in dividend income. Add in those returns, and you’ll have a total of passive income $8,176.46, or about $681.37 each and every month.
