Want $250/Month in Passive Income? Buy 2,213 Shares of This Stock

Canadians who want to generate $250 per month in passive income can snatch up shares in Bridgemarq Real Estate Services Inc. (TSX:BRE) today.

| More on:

Most Fool readers likely generate most of their wealth through active income. Active income requires consistent time and effort. Your full-time job, a weekend lawn mowing gig, and/or the sale of a real estate property or a vehicle all qualify as active income. Passive income, however, allows you to generate cash with little upkeep or consistent effort. For example, you could get royalties that you rake in from the successful sale of a book.

Today, we are going to explore how to generate passive income with a Canadian dividend stock. Let’s jump in.

How much monthly passive income should you aim for?

The amount of passive income you can generate through multiple sources is virtually unlimited. However, you should not look to sink all your investment cash into one or a handful of income-yielding equities. Diversification is important no matter what investment strategy you choose to pursue.

Inflation has weighed on Canadian consumers for most of 2022. This is especially true at the grocery store and the gas pump. In this instance, we are going to look to generate $250 in passive income through an individual stock. That $250/month could make a huge difference for a working family that faces growing bills.

Where should you stash your dividend stock?

Ideally, you should look to stash this stock in a Tax-Free Savings Account (TFSA). Income generated in a TFSA is entirely tax free. That means you get to pocket the entirety of that $250 without paying a dime to the Canada Revenue Agency (CRA). This alone is worth celebrating. By contrast, passive income generated through rental income or something like a published book will be subject to taxes. The TFSA is just too good to pass up for income-oriented investors.

This stock can deliver big passive income on a monthly basis

Bridgemarq Real Estate (TSX:BRE) is the Canadian stock I want to snatch up today to generate $250 in passive income in our TFSA. This Toronto-based company provides various services to residential real estate brokers and REALTORS in Canada. Shares of this real estate-focused dividend stock have dropped 17% in 2022 as of close on November 2. The stock is down 20% year over year.

Canadian real estate has been battered in 2022 in the face of the Bank of Canada’s aggressive rate-tightening policy path. This has dramatically impacted sales and home prices, especially in major metropolitan areas. Despite that, I’m still looking to snatch up Bridgemarq for its value and its mouth-watering income.

This stock currently offers a monthly dividend of $0.113 per share. That represents a monster 10% yield. In our hypothetical, we’ll look to snatch up 2,213 shares of Bridgemarq. This investment will allow us to generate passive income of $250 and change on a monthly basis. Once again, that monthly passive income will also be tax free if we stash it in a TFSA.

Meanwhile, shares of Bridgemarq also possess an attractive price-to-earnings ratio of 7.6 at the time of this writing. Canadian investors will be getting an undervalued dividend beast if they choose to go forward with this strategy in early November.

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 Ambrose O'Callaghan 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.

More on Dividend Stocks

dividends can compound over time
Dividend Stocks

Want a 7% Yield? The 3 TSX Stocks to Buy Today

These TSX stocks are offering high yields of over 7%, making them attractive for investors seeking steady passive income.

Read more »

how to save money
Dividend Stocks

The Smartest Dividend Stocks to Buy With $200 Right Now

These smartest dividend stocks can consistently pay and increase their dividends in the coming years, irrespective of the macro uncertainty.

Read more »

Electricity transmission towers with orange glowing wires against night sky
Dividend Stocks

3 Utility Stocks That Are Smart Buys for Canadians in November

These utility stocks benefit from regulated businesses and generate predictable cash flows that support higher dividend payouts.

Read more »

Start line on the highway
Dividend Stocks

Invest $10,000 in This Dividend Stock for $600 in Passive Income

Do you want to generate passive income? Forget the rental unit! This option will save you the mortgage yet still…

Read more »

Senior uses a laptop computer
Dividend Stocks

1 Reliable Dividend Stock for the Ultimate Retirement Income Stream

TD Bank (TSX:TD) shares are way too cheap with way too swollen a yield for retirees to pass up right…

Read more »

A worker drinks out of a mug in an office.
Dividend Stocks

Is Brookfield Infrastructure Partners a Buy for its 4.75% Yield?

Brookfield Infrastructure Partners (BIP) has a 4.75% dividend yield. Is it worth it?

Read more »

TFSA (Tax-Free Savings Account) on wooden blocks and Canadian one hundred dollar bills.
Dividend Stocks

Where to Invest Your $7,000 TFSA Contribution

The TFSA is attractive for investors who want to generate tax-free passive income.

Read more »

The TFSA is a powerful savings vehicle for Canadians who are saving for retirement.
Dividend Stocks

TFSA Investors: 3 Dividend Stocks Worth Holding Forever

These TSX stocks have the potential to grow their dividends over the next decade, making them top investments for TFSA…

Read more »