Want Decades of Passive Income? 4 Stocks to Buy Now and Hold Forever

Passive income doesn’t have to be tricky or complicated, especially with these top dividend stocks that weather any storm.

Happy golf player walks the course

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

Creating decades of passive income through investing is a journey of patience, strategy, and a sprinkle of excitement. The secret to success lies in the magic of dividends. Dividends are those delightful paycheques sent your way simply for holding shares in a company.

When reinvested, these create a snowball effect, compounding your returns over time. But not just any stock will do. Look for companies with a history of steady dividend payments, solid earnings growth, and a future that’s as promising as a summer day at the beach. Let’s dive into four such stocks on the TSX that you can confidently buy, hold, and watch grow for years to come.

Created with Highcharts 11.4.3Exchange Income + InterRent Real Estate Investment Trust + North West + SmartCentres Real Estate Investment Trust PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

1. Exchange Income

Exchange Income (TSX:EIF) might not grab headlines daily, but its results speak volumes. This company specializes in acquiring and managing niche businesses in aviation and manufacturing. These two sectors might sound cyclical but have proven remarkably resilient under EIF’s management. Since its founding in 2004, EIF has consistently paid, and often raised, its monthly dividend, thus showcasing a commitment to shareholders.

In its most recent earnings report, EIF reported revenue growth of 12% year-over-year, driven by strong demand across its business segments. Impressively, the passive income stock announced a dividend hike of 4.8%, pushing its yield higher. Looking ahead, EIF is expanding its aviation segment and exploring opportunities in renewable technologies, thus making it a compelling option for passive income seekers.

2. SmartCentres

SmartCentres REIT (TSX:SRU.UN) is a standout in the Canadian real estate scene, combining retail and mixed-use properties to create a diversified income stream. While it’s primarily known for its connection to Walmart-anchored shopping centres, SmartCentres is aggressively expanding into residential and office spaces under its “SmartLiving” and “SmartCentres Place” banners.

Its latest earnings report revealed funds from operations (FFO) growth of 8% year-over-year, underscoring its strong cash flow generation. The real estate investment trust (REIT) has maintained a monthly dividend yield of over 7%. With a robust development pipeline and plans to add thousands of residential units in the coming years, SmartCentres is positioning itself as a long-term play for income investors.

3. InterRent

Another gem in the real estate space, InterRent REIT (TSX:IIP.UN) focuses on acquiring and managing multi-residential properties across Canada. Unlike some REITs that aim for sheer scale, InterRent takes a quality-over-quantity approach, emphasizing high-demand urban markets where rental growth potential is significant.

In its most recent financial results, InterRent posted revenue growth of 10%, driven by higher rental income and property acquisitions. While its dividend yield of around 2.5% may seem modest, its consistent increases and capital appreciation potential make it an attractive choice. The REIT’s strategy of upgrading older properties into modern spaces ensures it stays competitive in a tight rental market.

4. North West

The North West Company (TSX:NWC) may sound like a history lesson, but its business model is anything but old-fashioned. As a retailer serving remote and underserved markets in Canada, Alaska, and the Caribbean, North West has carved out a niche with little competition. This unique focus provides stable revenues and a loyal customer base, even in challenging economic times.

Recent earnings revealed steady revenue growth and an increase in operating income, highlighting the company’s ability to navigate inflationary pressures. With a dividend yield of approximately 4.5% and a payout ratio comfortably below 70%, North West provides reliable income with room for growth. Its ongoing investments in supply chain optimization and digital initiatives position it well for the future, making it a durable choice for your portfolio.

Bottom line

Investing in these passive income stocks is not just about the dividends. It’s about potential to weather economic storms and thrive in diverse conditions. By holding them long term, you give your investments the chance to grow while reaping the rewards of consistent payouts.

With discipline, you can build a portfolio that funds your dreams, whether it’s early retirement, a round-the-world trip, or simply more time for hobbies and family. By focusing on quality stocks like EIF, SmartCentres, InterRent, and North West Company, you’re setting yourself up for financial freedom that lasts not just years but decades.

Should you invest $1,000 in Mullen Group Ltd. right now?

Before you buy stock in Mullen Group Ltd., 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 Mullen Group Ltd. 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 positions in Walmart. The Motley Fool recommends North West, SmartCentres Real Estate Investment Trust, and Walmart. 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

concept of real estate evaluation
Dividend Stocks

Canadian Real Estate Stocks: How I’d Navigate This Sector With $15,000 During The Pullback

A $15,000 investment split among these two undervalued Canadian defensive REITs could generate high income yields with capital gains upside

Read more »

A worker gives a business presentation.
Dividend Stocks

2 Canadian Dividend Stocks I’d Buy With $3,000 Whenever They Dip in Price

There's no shortage of great Canadian dividend stocks to buy, but these two pose huge upside right now for income…

Read more »

hand stacks coins
Dividend Stocks

How I’d Invest $20,000 in Canadian Stocks for Lasting Generational Wealth

Long-term investors willing to be patient with their money should have these three TSX stocks to build lasting wealth.

Read more »

four people hold happy emoji masks
Dividend Stocks

The Best Canadian Dividend Stocks to Buy in April 2025

Canadian dividend stocks are some of the best options out there, and these few look like some of the best.

Read more »

Canadian dollars are printed
Dividend Stocks

How I’d Use $10,000 to Transform My TFSA Into a Cash-Generating Machine

It may be grim out there, but there are plenty of sky-high dividend yields to choose from on the TSX…

Read more »

Canada day banner background design of flag
Dividend Stocks

Top Canadian Stocks to Buy Right Now With $5,000

Looking for some safe, long-term stocks? These Canadian stocks are where you should look first.

Read more »

Car, EV, electric vehicle
Dividend Stocks

Outlook for Magna Stock in 2025

Magna stock has sunk into the toilet, but it could now be one of the best undervalued stocks out there.

Read more »

alcohol
Dividend Stocks

Why I’d Consider These 3 Blue-Chip Dividend Stocks for a $20,000 Lifelong Investment

In a market correction, it’s essential to focus on blue-chip stocks that offer stability and long-term growth potential.

Read more »