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Want Passive Income in 2023? Buy These High-Yield Dividend Stocks

Increasing yield
Image source: Getty Images

Written by Adam Othman at The Motley Fool Canada

Starting a passive income can be much more than just an investment decision. A substantial enough passive income can help you augment your income, better manage your finances, prevent you from taking on debt or help you reduce/eliminate any debt you might have. You need a significant amount of capital and the right high-yield stocks to generate a substantial passive income.

A mortgage company

Like most other non-bank mortgage lenders in Canada, Atrium Mortgage Investment (TSX:AI) caters to individuals and commercial entities that can’t approach the big banks for mortgages and real estate loans. This is a surprisingly big market, thanks partly to the conservative approach of Canadian banking institutions.


Atrium is a relatively small player in that market segment. It has a market capitalization of about $521 million, putting it close to the lower end of small-cap stocks in Canada. The company is currently modestly discounted — i.e., 18% from its pre-pandemic peak.

The company caters to residential borrowers and commercial entities and offers solutions other than mortgages. This includes development and bridge financing.

It’s a fantastic pick from a dividend yield perspective, which is 7.42% right now. So, if you were to invest $50,000 in the company, you would generate a passive monthly income of about $309. That’s roughly the average cost of utilities in some provinces, so the passive income can help you cover one of your regular monthly expenses. A healthy payout ratio backs the high yield.


Allied Properties Real Estate Investment (TSX:AP.UN) is among the more prominent REITs in Canada, though it certainly doesn’t seem that way considering its current market capitalization of just over $3 billion; that’s partly because the company has lost almost 60% of its valuation since its pre-pandemic peak.

The most straightforward explanation for such a significant decline is that the business model/business orientation of this REIT was especially susceptible to coronavirus. The company has an impressive portfolio of 200 urban workspaces across the country.

Since many companies switched to the work-from-home (WFH) model during the pandemic and are still experimenting with a hybrid version of WFH and on-site work, the demand for workspaces naturally suffered.

One benefit of this massive decline was the REIT’s yield going up, and it’s currently at 7.52%. If you allocate about $50,000 to the REIT, you can generate a monthly income of about $313. Another benefit of investing in this REIT right now would be the long-term recovery potential.

It used to be a great growth stock before the pandemic, and if it can repeat the pattern once the market goes bullish for the long term, you may reap the benefits.

Foolish takeaway

Collectively, the two stocks can help you generate a monthly income of about $622 (if you invest $100,000 in them). That’s enough to take care of multiple expenses you may have. If you are not planning on using this sum for any expenses, it can be reinvested in the market.

The post Want Passive Income in 2023? Buy These High-Yield Dividend Stocks appeared first on The Motley Fool Canada.

Free Dividend Stock Pick: 7.9% Yield and Monthly Payments

Canada’s inflation rate has skyrocketed to 6.9%, meaning you’re effectively losing money by investing in a GIC, or worse, leaving your money in a so-called “high interest” savings account.

That’s why we’re alerting investors to a high-yield Canadian dividend stock that looks ridiculously cheap right now. Not only does it yield a whopping 7.9%, but it pays monthly!

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Claim your free dividend stock pick * Percentages as of 11/29/22

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Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.