Investing in dividend stocks is a very popular strategy among Canadians, including me. This is because the prospect of generating passive income is very appealing. Think of it: being able to make money while you sleep. That means you’ll be able to generate income at your job and have additional ways of making money to supplement that. Whether you decide to use that extra money to boost your quality of life or if you use it to grow your retirement portfolio, there’s no denying that dividend stocks could help you do that.
Another great thing about dividend stocks that makes them stand out from other forms of passive income is the low barrier to entry. A couple of other ways that investors could generate passive income is by entering the real estate market or starting a business. In both cases, you’ll need to put up a lot more cash upfront, and there’s a lot more risk associated with those endeavours.
Yes, there’s always a chance that the dividend stocks you invest in could tank or that a dividend could be cut or suspended. However, by investing over the long term, you shouldn’t really be worried about a dividend stock’s price on a day-to-day or even month-to-month basis. In addition, if you’re looking for certain qualities in the dividend stocks you invest in, then it makes it less likely that you’d see your dividends slashed or suspended.
What dividend stocks could generate $1,000 per year?
Bank of Nova Scotia (TSX:BNS) is one of my favourite dividend stocks to invest in. I think it’s a very stable company, given its leadership position within one of the most reliable sectors in Canada. In addition, its dividend is one of the most reliable, in my opinion. I also think Bank of Nova Scotia is a great stock that investors could put money into if they want to generate $1,000 of passive income per year.
As of this writing, Bank of Nova Scotia stock pays shareholders $4.24 on an annual basis per share. In order to generate $1,000 of passive income solely through Bank of Nova Scotia stock, you’d need to purchase 236 shares. In other words, you’ll need to invest just under $15,000 into this company. Although that may sound like a lot, note that Bank of Nova Scotia currently offers a forward yield of 6.70%. That’s very good value for your money, and you’d be hard-pressed to find a better yield from a reliable company.
Speaking of reliability, Bank of Nova Scotia has been paying shareholders a dividend since 1833. Since then, it has never missed a single dividend payment. That means, despite all of the tough economic conditions that we’ve seen since then, Bank of Nova Scotia has still been able to reward its shareholders. It also represents 190 straight years of dividend payments. If that doesn’t sound like a reliable dividend payer to you, then I’m not quite sure what else could be. This is an elite dividend stock, in my opinion.