How Investing $100 Per Week Can Create $1,500 in Annual Dividend Income

If you want high dividend income from just $100 per week, then pick up this dividend stock and keep reinvesting. You’ll get there quite soon.

| More on:
Canadian Dollars

Image source: Getty Images

It’s true that while investing $100 per week could give you $5,200 in income, annual dividend income simply isn’t going to add up and create $1,500 … yet.

And that’s the key here. Today, we’re going to discuss how investing that $5,200 year after year can easily create $1,500 eventually, and perhaps a lot sooner than you’d think.

The best stock to consider

If you’re looking for dividend income, then you’ll want a company offering up a high dividend for a great price — one that’s sure to do well in the years to come, offering growth and income after providing so much in the past.

One company I would consider is goeasy (TSX:GSY). goeasy stock is a Canadian-based financial services company that provides non-prime leasing and lending services through its two main operating divisions: easyfinancial and easyhome. goeasy stock focuses on serving consumers who may have limited access to traditional banking products and services due to credit challenges or other financial constraints. 

Over the years, goeasy has expanded its presence across Canada, serving customers through a network of branches and online platforms. The company has also pursued strategic acquisitions and partnerships to broaden its product offerings and geographic reach. And that looks to continue in the year to come.

Doing well

Not only has goeasy stock done well in the last few years, it’s been doing well for decades. Yet these last few years have been no exception, with goeasy stock seeing a growth in its loan profile quarter after quarter.

The company, in fact, doesn’t see any issues with the federal budget’s plan last year to lower the annual percentage interest rate for loan providers to offer. Meanwhile, the spring budget kept these levels the same. And this should mean even more growth for goeasy stock in the future.

This is all to say that goeasy stock should continue to support its dividend, currently with a 2.7% dividend yield. And with even more coming through returns, it’s a strong stock to consider. So, let’s look at how long it might take you to reach that $1,500 level.

Breaking it down

In the case of goeasy stock, without including returns, it should take about a decade before goeasy stock provides annual dividend income of $1,500. This would be from investing $5,200 in the stock each year during that time. Meanwhile, you’ll see shares increase at a compound annual growth rate (CAGR) of 14% if history repeats itself as it has over the last 20 years.

In that time, the dividend has increased at a CAGR of 13%. So, let’s see what you could achieve in that decade.

YearShare PriceShares OwnedShare ValueAnnual Dividend Per ShareAnnual DividendAfter DRIP ValueAnnual ContributionYear End Stock PriceNew Shares PurchasedYear End Shares OwnedNew Balance

As you can see, by year seven, you will have achieved that mark of $1,500 and even higher. But you also will have significant returns, which makes this a solid stock for investors to consider — especially if they want more than just some dividends.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Amy Legate-Wolfe has positions in Goeasy. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

More on Dividend Stocks

bulb idea thinking
Dividend Stocks

The Smartest Dividend Stocks to Buy With $500 Right Now

Got $500 to invest in Canadian dividend stocks? Here are three quality stocks for growing streams of safe dividend income.

Read more »

Arrowings ascending on a chalkboard
Dividend Stocks

Soaring Dividends: 2 TSX Stocks Delivering Value at All-Time Highs

Buying these value TSX dividend stocks today can help you lock in high dividend yields and strong returns over the…

Read more »

Business success with growing, rising charts and businessman in background
Dividend Stocks

5 TSX Stocks With High Dividend Growth to Buy Now

These TSX stocks sport a high dividend growth rate and are known for consistently rewarding their shareholders with increased cash.

Read more »

Various Canadian dollars in gray pants pocket
Dividend Stocks

Canadian Blue-Chip Stocks: The Best of the Best for May 2024

These two blue-chip stocks are up in 2023, sure, but have seen even more growth in the last few decades.…

Read more »

Couple relaxing on a beach in front of a sunset
Dividend Stocks

Passive Income: How to Make $33 Per Month Tax-Free by Doing Nothing

Hold monthly paying dividend stocks such as Exchange Income in your TFSA to begin a tax-free stream of passive income…

Read more »

data analyze research
Dividend Stocks

Is Telus Stock a Buy on a Dip?

Telus is down more than 20% over the past year and now offers a great dividend yield.

Read more »

A plant grows from coins.
Dividend Stocks

2 Top Dividend-Growth Stocks to Buy in May

These two dividend stocks saw major growth after earnings that promised more was coming in the future. And now could…

Read more »

Dots over the earth connecting the world
Dividend Stocks

Best Stocks to Buy in May 2024: TSX Telecommunication Services Sector

The telecommunication services sector is currently going through an upheaval. It is a good time to buy these stocks.

Read more »