Owning dividend-paying stocks is one of the easiest ways to earn a decent amount of passive income over a long period. Fortunately, the Canadian stock exchange offers many fundamentally strong stocks paying regular dividends to their investors.
In this article, I’ll highlight three prominent passive-income stocks on the TSX for you to invest in before the start of 2024.
Dream Industrial REIT
Dream Industrial REIT (TSX: DIR.UN) is an open-ended real estate investment trust (REIT) with a diversified portfolio of assets, mostly industrial and logistics buildings. Under its portfolio, this company manages and runs 322 industrial assets. These cover approximately 70.6 million square feet of gross leasable areas in Canada, the U.S., and Europe.
This REIT aims to generate substantial returns for shareholders by investing in a top-notch real estate portfolio that provides efficient cash flow. Furthermore, this company offers regular and decent dividend payouts to shareholders every month. Currently, Dream Industrial stock provides investors with a dividend yield of 5.35% and a payout ratio of 264.87%.
Dream Industrial REIT recently reported impressive results in its fiscal third quarter. The company’s net income grew 17.4% year over year to US$84.5 million this past quarter. Meanwhile, its net operating income saw a 10.4% growth to US$84.6 million.
So long as this growth continues and the company’s fundamentals improve (its payout ratio appears stretched currently), this stock has some serious room to run.
Restaurant Brands
In the fast-food industry, Restaurant Brand International (TSX:QSR) remains my top pick by a long shot. This fast-food conglomerate is best known in Canada for its ownership of Tim Hortons. That said, the company’s other brands (Burger King, Popeyes, and Firehouse Subs) may be better known internationally and have excellent growth prospects. Currently, Restaurant Brands boasts 28,000 restaurants across 100 countries.
This company’s forward dividend yield is 3.65%, while its dividend-payout ratio is 81.7%. By investing in QSR stock, investors can earn consistent dividend income over the long term. This company has maintained an excellent track record of increasing its dividends for the past five years.
According to its second-quarter (Q2) report, Restaurant Brands International records a 9.6% consolidated growth in comparable sales. The company’s earnings before interest, taxes, depreciation, and amortization grew from US$618 million in 2022 to US$665 million in Q2 2023.
Fortis
Fortis (TSX:FTS) is a prominent name in the electricity and gas sector in Canada, the U.S., and a few Caribbean countries. This company sells wholesale electricity to customers in the western United States. This company also distributes natural gas to approximately 1,076,000 commercial, residential, and industrial customers in British Columbia.
Fortis is among the best companies for investors to consider when it comes to creating a passive-income stream and growing one’s retirement portfolio. This company has reported impressive growth in recent years, maintaining a stable 4.8% annual growth rate in terms of its share price and earnings per share.
For passive-income investors specifically, the company’s track record of raising its dividend yield each and every year for the past five decades is almost unmatched in Canada. Thus, I think this is a 4.4%-yielding stock investors should buy now and forget about for a long time.
