If you’re like me, then you’re still considering safe dividend stocks as your top investments these days. While passive income certainly comes through returns, it’s nice to know that you also have that dividend income coming in at a regular clip.
This is why today, we’re going to look at two strong options for creating passive income in 2024 — not just dividend income that will remain safe now and in the future but ones that also create strong returns. So, let’s look at two options to consider on the TSX today.
A REIT
There are many real estate investment trusts (REITs) that continue to be a struggle for investors these days. Higher interest rates, high rents, and high inflation have left many REITs floundering, which is why it’s a great time to go essential.
In that case, one of the best REITs you can buy right now is Granite REIT (TSX:GRT.UN). Granite REIT offers exposure to the industrial sector, investing in the growing area of industrial properties. These are used for warehouses, logistics centres, assembly, and e-commerce.
Granite REIT also offers a large 4.29% dividend yield, coming in at $3.30 per year. With the company expanding through property acquisitions and continued rental agreements, it’s a strong choice for ongoing passive income.
A Canadian bank
Some of the best investments Canadians can also make right now are through Canadian banks. These banks are far superior when it comes to safety than their American counterparts. They’re huge, frankly. In fact, the largest bank in Canada would easily fit into the top five American banks as well.
But above them all, Royal Bank of Canada (TSX:RY) offers the best in terms of safety and growth. The bank is the largest, with stable income from its wealth and commercial management sector. However, it’s also growing thanks to its acquisition of HSBC Canada.
With so much growth coming and an improving balance sheet as well, RBC stock looks like a solid buy — especially as it recently hit 52-week highs! All while offering a dividend yield at 4.04% as of writing, coming out as $5.52 per share annually.
Making that money
Now, if you want to create a lot of passive income in 2024, there is a lot to consider. First and foremost is how it fits within your overall goals. Can you reinvest this cash over and over, or do you have debt that needs to be paid? Furthermore, how much can you even afford to put aside each month?
Let’s say you can manage $500 per month, putting $250 into each stock. You then see them grow by their compound annual growth rate (CAGR) over the last decade. For Granite REIT, that would be 6%, and for RBC stock, that would be 6.5%. So, you then invest a total of $6,000 into these stocks.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | PORTFOLIO TOTAL | NEW SHARE PRICE | NEW PORTFOLIO TOTAL |
| GRT.UN | $76 | 39 | $3.30 | $128.70 | monthly | $3,000 | $80.56 | $3,141.84 |
| RY | $136 | 22 | $5.52 | $121.44 | quarterly | $3,000 | $144.84 | $3,186.48 |
In total, you would create returns of $328.32 and dividend income of $225.40. That would come to a total of $553.72 — all from an investment that will likely keep on growing.
