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.

Should you invest $1,000 in Cenovus Energy right now?

Before you buy stock in Cenovus Energy, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Cenovus Energy wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $21,345.77!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 24 percentage points since 2013*.

See the Top Stocks * Returns as of 4/21/25

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.

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Dividend Stocks

Dividend Stocks

This Canadian Monthly Dividend Stock Pays a Stunning 9% Yield

Pro REIT is a Canada-based real estate company that offers you a forward yield of 9% in 2025. Is this…

Read more »

TFSA (Tax free savings account) acronym on wooden cubes on the background of stacks of coins
Dividend Stocks

How I’d Invest $7,000 in My TFSA for $660 in Tax-Free Annual Income

Canadians looking for ways to make the most of the new TFSA contribution room should consider investing in these two…

Read more »

Doctor talking to a patient in the corridor of a hospital.
Dividend Stocks

This Dividend King Paying 7.5% in Monthly Income Is a Must-Have

This high-yield TSX stock might not be a textbook Dividend King, but its reliable monthly payouts and improving financials make…

Read more »

path road success business
Dividend Stocks

How to Invest $50,000 of Tax-Free Cash as Canada-US Trade Uncertainty Escalates

Few Canadian stocks are as easy a choice as this one, making it perfect during volatile periods.

Read more »

monthly desk calendar
Dividend Stocks

How I’d Generate $200 in Monthly Income With a $7,000 Investment

Want to establish $200 in monthly income (or even more?) Here's an easy way to start today that will provide…

Read more »

Printing canadian dollar bills on a print machine
Dividend Stocks

Got $25,000? Turn it Into $250,000 in a TFSA as the Canadian Dollar Rises

Investing doesn't have to be risky or difficult, especially with this top stock.

Read more »

A woman shops in a grocery store while pushing a stroller with a child
Dividend Stocks

Where Will Loblaw Be in 3 Years?

Loblaw (TSX:L) stock could be a stellar performer as tariffs and headwinds move in on Canada's economy.

Read more »

customer uses bank ATM
Dividend Stocks

Where Will National Bank Be in 5 Years?

National Bank of Canada (TSX:NA) stock still looks like a great deal at these levels.

Read more »