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Forget Side Hustles: This Blue-Chip Stock Is Your Next Income Stream

four people hold happy emoji masks
Source: Getty Images

Written by Amy Legate-Wolfe at The Motley Fool Canada

Canadians were out in force seeking out side hustles during the pandemic. Whether it was drop shipping or investments, we were all looking for a new way to make some extra money. For some, it was a way to create a bit more fun income. For others, it was a necessity.

Now, the situation has become a bit more dire. Higher interest rates and inflation have made it difficult for Canadians looking to put money aside to invest — never mind finding other opportunities to create extra cash.

This is why today we’re going to look at a different method and investing what you have in a strong blue-chip stock. So, let’s get into it.

Go for growth

When I say, “go for growth,” let me be clear: what I don’t mean is looking for the next big growth stock. Growth stocks can be incredibly volatile, especially during this period when investors are looking to get returns quickly.

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Those quick returns can lead to quick sales, which can lead to incredibly quick drops in share price. That is why you want to find a long-term hold that has provided growth year after year for decades.

In this case, what you want are companies that have a stable means of creating growth — something the company has proven time and again to be successful at achieving, which is why we’ll be considering Constellation Software (TSX:CSU).

Why CSU stock

CSU stock is the perfect option for Canadian investors who want to achieve long-term growth. That’s because the company has already achieved long-term growth over and over again. The company came on the scene back in 1995 under Mark Leonard. He is still the chief executive officer today and has proven to be worth his weight in gold.

Leonard has focused on finding valuable software companies in essential, niche markets. This allows CSU stock to corner the market in that area — whether it’s the library catalogue you use, the real estate listings you’re perusing, or even the electronic health records you’re inputting online. CSU stock could be part of each and every one.

This has allowed the company to become a powerhouse when it comes to identifying these valuable, niche markets. CSU stock then acquires these companies and adds them to the already stellar source of revenue it achieves annually — all for a steal.

The proof is already there

Think about it. The company came on the scene back in 1995, and that was when many people thought the internet would just be a fad. Fast forward, and it’s literally part of almost every aspect of our lives. And that has created even more opportunities for this blue-chip stock, not less.

In the last 10 years, CSU stock has seen shares grow by about 1,400% as of writing! That’s a compound annual growth rate (CAGR) of 29% each and every year. During some of the most difficult times we’ve seen!

So, if you want to create another income stream, this is certainly the way to do it. You can achieve potentially 29% in returns every year, along with a dividend of 0.15%. So, consider CSU stock as your next income stream rather than the stress of a side hustle.

The post Forget Side Hustles: This Blue-Chip Stock Is Your Next Income Stream appeared first on The Motley Fool Canada.

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

2024