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This Dividend Stock Could Create $1,353 in Passive Income in 2024

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Image source: Getty Images

Written by Amy Legate-Wolfe at The Motley Fool Canada

Finding a great dividend stock these days can make all the difference. That’s especially as more and more analysts and government agencies believe we’re in for a far more positive future. One that could involve a bull market very soon.

This is why investors should consider picking up a dividend stock for massive passive income these days. Because right now, many are down, offering returns on top of that dividend yield. And here is one I would pick up immediately for 2024.

A recovery REIT

If you’re going to look for a solid dividend stock, then I would consider real estate investment trusts (REIT) right now. There are many REITs out there, yet not as many that offer almost guaranteed growth as interest rates and inflation get under control.

What investors should consider are companies that have been involved in retail. Further, ones that may also be involved in residential properties. Retail has taken a huge hit, with inflation leading to lower consumption. Further, the pandemic also hurt these REITs.

Beyond that, residential properties remain under pressure from higher interest rates. Even apartment buildings and rents have gone up as landlords try to keep up. With that in mind, there are many things that could improve as inflation and interest rates move lower. But this could be the best.

Choice REIT

Choice Properties REIT (TSX:CHP.UN) is therefore an excellent option for investors seeking passive income from dividend stocks these days. Choice REIT is the main landlord of Loblaw Companies (TSX:L). This is Canada’s largest grocery chain, which also includes diversified assets such as the acquisition of Shoppers Drug Mart, its loyalty program, and low-cost options.

But even further from that, Choice REIT offers mixed-use properties. These are properties in urban areas that will have a company, such as Loblaw on the bottom floor, with residential properties above. Therefore, residents can live, work and shop all in one area.

And right now, Choice REIT offers some value for investors. It trades at just 14.15 times earnings, with a dividend yield of 5.76% as of writing. Shares are still down 12% in the last year, and it trades with just 8.96 enterprise value (EV) over earnings before interest, taxes, depreciation, and amortization (EBITDA). So, now let’s look at how much passive income could come your way.

Getting passive income

Now, if you’re going to create a lot of passive income from this dividend stock, consider both sources. First, with shares down 12%, you can look forward to potentially large returns from the dividend stock. That alone is a strong passive income.

Then, there is the more traditional dividend itself. This dividend yield is currently a fair amount higher than the five-year average for Choice REIT, at 5.42%. Therefore, you can get a higher dividend yield at a great price! So, let’s look at how much a $5,000 investment could bring in for you in passive income.

COMPANY

RECENT PRICE

NUMBER OF SHARES

DIVIDEND

TOTAL PAYOUT

FREQUENCY

PORTFOLIO TOTAL

CHP.UN – now

$13

385

$0.75

$288.75

monthly

$5,000

CHP.UN – highs

$15.75

385

$0.75

$288.75

monthly

$6,063.75

Now, as you can see, you’ve made $288.75 in dividend income and $1,063.75 in returns. That’s total passive income of $1,352.50 from this dividend stock! This is why I would certainly consider it today.

The post This Dividend Stock Could Create $1,353 in Passive Income in 2024 appeared first on The Motley Fool Canada.

Should You Invest $1,000 In Choice Properties Real Estate Investment Trust?

Before you consider Choice Properties Real Estate Investment Trust, you'll want to hear this.

Our market-beating analyst team just revealed what they believe are the 5 best stocks for investors to buy in November 2023... and Choice Properties Real Estate Investment Trust wasn't on the list.

The online investing service they've run for nearly a decade, Motley Fool Stock Advisor Canada, is beating the TSX by 24 percentage points. And right now, they think there are 5 stocks that are better buys.

See the 5 Stocks * Returns as of 11/14/23

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

2023