Establishing a passive income stream is one of the long-term objectives of every single investor. Fortunately, meeting that goal is easier than you may think as the market is full of great Canadian stocks to buy.
Here’s a look at some of those great income stocks to consider buying today for passive income.
You probably don’t see this as an income stock
Are you invested in Enbridge (TSX:ENB)? The energy infrastructure behemoth is known for its lucrative pipeline segment, but few realize the crazy potential it has for passive income.
Enbridge’s pipeline business, which includes both crude and natural gas segments, hauls massive — if not insane —amounts of both each day. To put the volume into context, consider this.
Enbridge hauls one-third of all North American-produced crude and one-fifth of the natural gas needs of the U.S. market.
This makes the stock one of the most defensive picks on the market, and that reliable revenue stream translates into a juicy dividend (but more on that in a moment).
In addition to its pipeline business, Enbridge also operates a growing renewable energy business as well as a natural gas utility. In other words, that defensive appeal (and passive income generation) extends beyond its well-known pipeline business.
As of the time of writing, Enbridge pays out a quarterly dividend of 6%. This means a $20,000 investment will generate just over $1,200 in passive income.
Prospective investors should note that reinvesting those dividends until needed will allow that nest egg to grow further. Oh, and let’s not forget that Enbridge has provided annual upticks to that dividend for three decades without fail.
REITs can be an insane source of passive income
Another great option for investors seeking passive income is REITs (Real Estate Investment Trusts). And the one REIT for investors to consider right now is RioCan Real Estate (TSX:REI.UN).
RioCan has historically offered investors a portfolio of primarily commercial retail sites to invest in. In recent years, however, that mix has changed to include a growing number of mixed-use residential properties.
And that is where a massive opportunity awaits.
The residential properties, which comprise residential towers sitting atop several floors of retail, are situated in Canada’s major metro markets. More specifically, they are located in high-demand transit corridors in those markets.
For investors, RioCan represents an alternative to investing in a single rental property. Instead, investors can spread the risk out over hundreds of properties, without the need for a mortgage or tenant.
Another key advantage for prospective investors comes in the form of RioCan’s distribution, which much like a landlord collecting rent, is paid out monthly.
As of the time of writing, RioCan pays out a yield of 6%. This means a similar $20,000 investment will generate just over $100 each month.
All hail the Dividend King
One final passive income option to consider is Canadian Utilities (TSX:CU). Canadian Utilities is a utility stock that generates predictable revenue thanks to its stable and regulated business model.
This in turn allows the company to pay out a handsome dividend and invest in growth.
As of the time of writing, Canadian Utilities boasts a quarterly dividend that carries a yield of 5.3%. But that’s not even the best part.
Canadian Utilities is one of just two stocks on the market with the label of Dividend King. This means that the company has provided at least 50 consecutive years of dividend increases. That dividend streak currently stands at 52 years, and Canadian Utilities plans to continue that cadence.
This makes the stock an incredibly appealing option for any investor, and one of the passive income must-haves for any portfolio.
Build your passive income portfolio
The trio of stocks mentioned above can provide decades of solid growth and income. Even better, investors who aren’t ready to draw on that income yet can reinvest those dividends until needed, allowing them to grow further.
Here’s a snapshot of how a passive income portfolio can provide a juicy income.
| Company | Recent Price | No. of Shares | Dividend | Total Payout | Frequency |
| Enbridge | $62.47 | 320 | $3.77 | $301.60 | Quarterly |
| RioCan Real Estate | $18.31 | 1092 | $1.11 | $101.10 | Monthly |
| Canadian Utilities | $33.88 | 590 | $1.81 | $266.98 | Quarterly |
