In the times we live in today, having a single source of income cannot guarantee a financially secure future. People in the workforce try to accommodate a more substantial household income through multiple jobs. The only problem is, even working numerous shifts might not be enough in times of economic uncertainty.
Passive income sources are a great way to bolster your overall monthly income to secure a better financial standing. Generating passive income, however, is a lot easier said than done. People resort to mainstream assets like bonds, property, and cash, but they offer relatively low yields most of the time.
Dividend stocks for passive income
Focusing your capital on dividend stocks, on the other hand, can present you with the potential to grow your payouts by a significant margin in the long run. If you play your cards right, it might even be possible to boost your passive income to a more respectable amount in the short-term. You can enjoy greater financial freedom through sustainable income with dividend payouts.
In the long term, a dividend-paying stock from a reliable sector can further boost your overall financial situation. It can also increase your passive income through dividends if you hold it in your Tax-Free Savings Account (TFSA). To this end, I feel that the energy sector’s historical performance on the TSX means that your ideal low-risk stock should come from within its ranks.
Passive income pipeline
I think that Pembina Pipeline Corporation (TSX:PPL)(NYSE:PBA) is a high-quality stock to buy and hold in your TFSA right now. The company’s shares can allow you to earn plenty through passive income and leverage better long-term growth. There are so many reasons to love the company.
A stable income
Pembina is one of the dividend aristocrats on the Toronto Stock Exchange. The standing is given to companies that increase dividend payouts to shareholders consecutively for five years or more. Pembina has a streak of dividend growth for the past 10 years, with a 4.2% increase on average per year. Additionally, the company pays shareholders dividends every month.
The dividend yield for Pembina shares at the time of writing is a juicy 5.19%. With a price of $46.21 per share, you can expect an income of $0.2 for every share you own through the current dividend yield. Let us take a look at how much you can earn per month if you allocate your capital toward Pembina stocks.
If you invest approximately $47,000 of your capital to buy Pembina shares, you will own 1,017 shares of the company. If you get $0.2 per share every month, you are looking at a monthly income of $203 plus change for your investment. Because the company continues to grow dividends annually, you stand to earn even more per month on your investment.
Foolish takeaway
A safe and reliable stock like Pembina could potentially mean wonders for your financial security. The stock is likely to perform well even during market downturns, and you can expect to receive increasing dividend payouts every month. I feel that Pembina could be a great way to make a passive monthly income through your TFSA.
