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Want $2,000 in Annual Dividends? Invest $27,000 in These 3 Stocks

A close up image of Canadian $20 Dollar bills
Image source: Getty Images

Written by Rajiv Nanjapla at The Motley Fool Canada

With high inflation eating into your pocket, one can look to earn a stable passive income to overcome the impact. Investing in high-yielding dividend stocks would be one of the cheaper and convenient ways to earn passive income. Meanwhile, you can earn a passive income of over $2,000 annually by investing $9,000 in each of the following three high-yielding dividend stocks.

COMPANY

RECENT PRICE

NUMBER OF SHARES

INVESTMENT

DIVIDEND

TOTAL PAYOUT

FREQUENCY

TRP

$52.43

171

$8,966

$0.96

$164.2

Quarterly

BCE

$45.89

196

$8,994

$0.9975

$195.5


Quarterly

NWH.UN

$5.1

1764

$8,996

$0.03

$52.9

Monthly

TC Energy

TC Energy (TSX:TRP) operates a diversified utility-like business, with around 97% of its adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) generated from rate regulation and long-term contracts. Thus, its cash flows are less susceptible to economic fluctuations, allowing it to raise dividends at an annualized rate of 7% since 2000. It currently pays a quarterly dividend of $0.96/share, with its forward yield at 7.32%.

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Meanwhile, the company expects to make a capital investment of $8-$8.5 billion this year and is confident of putting $7 billion of projects into service. Further, the company’s management expects to make capital expenditure of $6-$7 billion annually after 2024. It also focuses on divesting non-core assets, which could strengthen its balance sheet. The company’s management hopes to generate $3 billion through asset sales this year, which could help lower its debt levels. Given its healthy growth prospects and improving financial position, TRP’s management is confident of raising its dividends by 3-5% annually for the next three years.

BCE

Over the last two years, the telecom sector has been under pressure due to rising interest rates and unfavourable regulatory decisions. Despite the near-term weakness, the sector’s growth prospects look healthy, given the growing demand amid digitization and remote working and learning. So, I have chosen BCE (TSX:BCE), one of the three top Canadian telecom players, as my second pick. It has lost around 26% of its stock value compared to its 52-week high, with its NTM (next 12 months) price-to-earnings ratio declining to 13.

Meanwhile, BCE is expanding its 5G infrastructure, which could increase its customer base. The company and its peers are working with regulatory authorities to derive a middle ground that could retain competition without disincentivizing companies that have made substantial capital investments in expanding broadband infrastructure. Further, interest rates could eventually fall, thus helping the company to lower its interest expenses. Notably, the recent correction has increased its dividend yield to 8.7%, making it an attractive buy.

NorthWest Healthcare Properties REIT

NorthWest Healthcare Properties REIT (TSX:NWH.UN) is another high-yielding dividend stock to have in your portfolio due to its defensive healthcare portfolio, long-term lease agreements, and inflation-indexed rent. After two tough years, the company has witnessed healthy buying over the last few weeks amid an improvement in its financial position and operating metrics.

Over the last four quarters, NorthWest Healthcare has sold 27 properties, generating $696 million. It utilized these net proceeds to pay off debt with higher interest rates, thus improving its financial health. Further, its occupancy and collection rates in the first quarter stood at 96.5% and 98%, respectively. The aging population could increase healthcare demand, thus benefiting the company. So, I believe NorhtWest Healthcare is well-positioned to continue paying dividends at a healthier rate. Its monthly dividend of $0.03/share translates to a forward yield of 7.1%.

The post Want $2,000 in Annual Dividends? Invest $27,000 in These 3 Stocks appeared first on The Motley Fool Canada.

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Fool contributor Rajiv Nanjapla has no position in any of the stocks mentioned. The Motley Fool recommends NorthWest Healthcare Properties Real Estate Investment Trust. The Motley Fool has a disclosure policy.

2024