Buy 7,895 Shares of This Top Dividend Stock for $500/Month in Passive Income

This top dividend stock is a huge player in the dividend scene, but it’s even more impressive that you can create insane passive income!

| More on:
Pile of Canadian dollar bills in various denominations

Source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

A top dividend stock is like the golden goose of your investment portfolio. It just keeps laying those golden eggs! The key ingredients? Consistency, growth, and a solid financial foundation. You want a company that’s been paying dividends like clockwork for years — even better if they’ve been raising those dividends regularly. This shows the stock is not only reliable but also growing. Look for companies with low payout ratios (the percentage of earnings they dish out as dividends), as this means the stock is not overextending and can sustain payments even in tougher times.

Now, for that sweet monthly passive income, it’s all about the payout frequency. Some stocks pay quarterly, but if you mix in those juicy monthly dividend payers, you can smooth out your cash flow. REITs (real estate investment trusts) and certain income-focused funds often lead the charge here. They’re built to funnel a chunk of their profits back to shareholders every single month. This makes them ideal for those looking to cover regular expenses or just wanting to watch their account balance grow steadily. Now, let’s get into one stock that looks primed to power your passive income.

Choice Properties REIT

Created with Highcharts 11.4.3Choice Properties Real Estate Investment Trust PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

Choice Properties REIT (TSX:CHP.UN) has been a steady player in the Canadian dividend scene. Since its inception, CHP.UN has consistently rewarded its shareholders with regular dividend payments. While it might not be the flashiest stock on the TSX, it’s certainly one of the more reliable ones. The company has managed to keep its dividend payouts stable, even during rocky economic times. This says a lot about its underlying financial health and management’s commitment to returning value to investors.

Over the years, CHP.UN has maintained a respectable yield, making it a solid pick for those seeking steady, long-term income. While you might not see massive dividend hikes, you can count on those payments landing in your account like clockwork. This provides a dependable stream of passive income that dividend investors love. So, if you’re looking for a stock that’s more about consistency than wild excitement, CHP.UN fits the bill perfectly!

Momentum on the way

When it comes to considering CHP.UN as a dividend stock, it’s clear the stock is both steady and reliable. With a forward annual dividend yield hovering around 5.35%, CHP.UN offers an attractive payout for income-focused investors. The REIT has a strong track record of consistent dividend payments, and its recent yield shows it’s still committed to rewarding its shareholders. While it might not be the highest yield out there, the stability CHP.UN offers makes it a solid contender for those looking to build a dependable passive-income stream.

However, it’s worth noting that CHP.UN’s payout ratio is on the higher side at 84.42%. This means it’s returning a significant portion of its earnings to shareholders. While this is great for current income, it could limit the REIT’s ability to grow its dividends further down the road. Additionally, with a high debt-to-equity ratio of 249.71%, the company is quite leveraged. This might pose some risks if interest rates climb or the real estate market faces headwinds. Still, if you’re looking for a reliable dividend payer in the real estate sector, CHP.UN is definitely worth a look, especially if you value consistency over high-risk, high-reward plays.

Bottom line

Now, let’s say you want to create $500 from this dividend stock each month. That would mean putting a lot of investment in CHP.UN. However, the stock is trading at a good price for investors looking for monthly income at these levels. So, let’s see how much you’d need to invest to create $500 each month or $6,000 per year.

COMPANYRECENT PRICENUMBER OF SHARESDIVIDENDTOTAL PAYOUTFREQUENCYPORTFOLIO TOTAL
CHP.UN$147,895$0.76$6,000.20Monthly$110,530

As you can see, that’s no small number. And I would never recommend investors put all their eggs in one basket like this. However, it does show that investors can create significant income through investing in a stock like CHP.UN. As always, discuss these types of moves with your financial advisor before making any decisions.

Should you invest $1,000 in Sun Life Financial right now?

Before you buy stock in Sun Life Financial, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Sun Life Financial wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $20,697.16!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 29 percentage points since 2013*.

See the Top Stocks * Returns as of 3/20/25

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 no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Dividend Stocks

protect, safe, trust
Dividend Stocks

How I’d Allocate $1,000 in Defensive Stocks in Today’s Market

These defensive stocks are outperforming the broader market despite economic uncertainty, providing stability, income, and growth.

Read more »

Piggy bank and Canadian coins
Dividend Stocks

Where I’d Invest My Savings in the TSX Today

These two TSX stocks would be my first picks if I were putting more money into the stock market today.

Read more »

Paper Canadian currency of various denominations
Dividend Stocks

How I’d Adjust My Portfolio to Benefit from Canadian Dollar Movements

TSX stocks benefit from Canadian dollar movements, although the loonie will be under pressure in 2025 due to trade uncertainty.

Read more »

Canadian Red maple leaves seamless wallpaper pattern
Dividend Stocks

5 Canadian Dividend Stocks to Buy and Hold for the Next 20 Years

These Canadian stocks have paid dividends for decades, making them reliable investments to generate regular passive income.

Read more »

Dividend Stocks

3 Canadian REIT Stocks to Buy and Hold for the Next Quarter-Century

These three Canadian REITs trade cheaply and are highly reliable, making them some of the best stocks you can buy…

Read more »

A train passes Morant's curve in Banff National Park in the Canadian Rockies.
Dividend Stocks

1 Practically Perfect Canadian Stock Down 24% to Buy Now and Hold for Life!

CNR stock is a top Canadian stock for investors, especially with shares down on the TSX today.

Read more »

Canada national flag waving in wind on clear day
Dividend Stocks

The Best Canadian Stocks to Buy Right Away With $30,000

If you have $30,000 you're willing to invest, these are some of the first Canadian stocks to consider on your…

Read more »

rail train
Dividend Stocks

What to Know About Canadian Pacific Railway Stock for 2025

CP stock has now gone through a major merger, so what do investors have to look forward to?

Read more »