CERB Users: Give Yourself a Big, Fat Raise With These 3 Passive-Income Generators

CERB users should buy TC Energy Corp. (TSX:TRP)(NYSE:TRP) and two other promising dividend plays to boost their income.

| More on:

CERB users shouldn’t expect the CRA payment to last forever. Sooner or later, the CERB payments will end, and they may stand to shrink for certain Canadians between now and the day they expire. As such, now is as good a time as any to leverage one’s savings to invest in passive-income generators that help supplement your income today and be there for you when those CERB cheques stop flowing in.

Without further ado, consider the following three passive-income securities that can fuel a sustainable passive-income stream that can last indefinitely.

H&R REIT: A risk-on contrarian play for CERB users

H&R REIT (TSX:HR.UN) is a beaten-up REIT that currently sports a 7.1% yield following its recent distribution reduction in response to troubles brought forth by the coronavirus pandemic.

The diversified REIT is heavily weighted in some of the least-sexy real estate sub-industries today: retail and office. While the long-term impact of this pandemic on demand for such properties remains unknown, I’m in the camp that’s of the belief that demand for such properties will eventually recover to those pre-pandemic levels.

H&R REIT ripped the band-aid off by reducing its distribution by 50%. The distribution is now well covered, and some bulls think that the stock has 100% upside from these depths. If you’re a CERB user who’s seeks a chance to have their cake (significant passive income) and eat it too (capital gains), H&R REIT is worth betting on at $9 and change.

Suncor Energy: A quality energy kingpin that’s super cheap

Speaking of ripping the band-aid off, integrated energy kingpin Suncor Energy (TSX:SU)(NYSE:SU) slashed its dividend by 55%, and it got punished by investors for doing so.

The stock now sports a 3.6% dividend yield that’s very well covered. Although the firm could have kept its dividend intact for a longer duration given its decent financial footing, it’s apparent that management would rather prepare for the worst and reward investors with a big hike at a later date than delay the inevitable, only to disappoint shareholders at some point down the road.

Today, Suncor stock is overly punished and is a solid bet for those CERB users looking for sustainable income alongside a shot at outsized capital gains in the event of an upside correction in response to recovering oil prices. Suncor is no slouch. It’s still a king in the oil patch, but at the end of the day, it’s at the mercy of exogenous events that move the needle in energy prices.

TC Energy: A quality passive-income darling at a reasonable price

TC Energy (TSX:TRP)(NYSE:TRP) is the cream of the crop when it comes to midstream operators. The resilient pipeline kingpin is well diversified, both in terms of the liquids it moves and the geographies that it serves. The brilliant management team led by Russell Girling is in a spot to continue bucking the trend, rewarding investors with decent total returns, even as the industry continues facing headwinds.

At 5.7%, TC Energy’s dividend yield isn’t the largest in the world, but it is one of the best covered as far as midstream operators are concerned. Despite sensitivity to the price of the underlying commodities that it transports, the firm ultimately looks more utility-like in nature relative to many of its peers in the space. As the company looks to get new projects online, investors will stand to be rewarded with 8-10% dividend hikes until 2021 (and potentially beyond).

If you’re looking for a lower-volatility play at a nice discount (TRP trades at just 1.9 times book), TRP ought to be at the top of the shopping list of CERB users.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Joey Frenette has no position in any of the stocks mentioned.

More on Dividend Stocks

Train cars pass over trestle bridge in the mountains
Dividend Stocks

Is CNR Stock a Buy, Sell, or Hold for 2025?

Can CNR stock continue its long-term outperformance into 2025 and beyond? Let's explore whether now is a good time to…

Read more »

coins jump into piggy bank
Dividend Stocks

The Smartest Dividend Stocks to Buy With $500 Right Now

These top dividend stocks both offer attractive yields and trade off their highs, making them two of the best to…

Read more »

Middle aged man drinks coffee
Dividend Stocks

Here’s the Average TFSA Balance at Age 35 in Canada

At age 35, it might not seem like you need to be thinking about your future cash flow. But ideally,…

Read more »

ETF stands for Exchange Traded Fund
Dividend Stocks

How to Invest Your $7,000 TFSA Contribution in 2024

Here's how I would prioritize a $7,000 TFSA contribution for growth and income.

Read more »

a man relaxes with his feet on a pile of books
Dividend Stocks

CPP Pensioners: Watch for These Important Updates

The CPP is an excellent tool for retirees, but be sure to stay on top of important updates like these.

Read more »

Technology
Dividend Stocks

TFSA Investors: 3 Dividend Stocks I’d Buy and Hold Forever

These TSX dividend stocks are likely to help TFSA investors earn steady and growing passive income for decades.

Read more »

four people hold happy emoji masks
Dividend Stocks

Love Dividend Growth? Check Out These 2 Income-Boosting Stocks

National Bank of Canada (TSX:NA) and another Canadian dividend-growth stock are looking like a bargain going into December 2024.

Read more »

An investor uses a tablet
Dividend Stocks

A Dividend Giant I’d Buy Over Enbridge Stock Right Now

Enbridge stock may seem like the best of the best in terms of dividends, but honestly this one is far…

Read more »