2,500 Shares of This REIT Should Net You $127 in Passive Income Each Month

Canadian investors who are hungry for monthly passive income should snatch up Chartwell Retirement Residences REIT (TSX:CSH.UN) today.

| More on:

Image source: Getty Images

Stock market volatility has made it difficult for investors to gobble up consistent capital growth in the second half of 2022. There are continued fears of an economic pullback, as we look ahead to 2023. Canadian investors may want to consider tweaking their strategy in this environment.

Today, I want to explore how you can gobble up $127/month in passive income. To do that, we are going to zero in on Chartwell Retirement REIT (TSX:CSH.UN). Let’s jump in.

Why this REIT is worth holding for the long term

Chartwell Retirement is a real estate investment trust (REIT) that indirectly owns and operates a complete range of seniors housing communities from independent supportive living through assisted living to long-term care.

Demand for retirement and long-term-care facilities is set to grow steadily as Canada’s senior population is set to explode. In 2010, Canadians aged 65 or older made up 14% of the total population. That has grown to 19% in 2022 and is projected to reach 22% in 2030. Canadian seniors will require more housing and medical care than is currently available. That is why private expansion will be a necessity.

How has Chartwell stock performed in 2022?

Shares of this REIT have dropped 32% in 2022 as of early afternoon trading on December 8. That has pushed the stock into negative territory in the year-over-year period. Please see the interactive chart below for more details on Chartwell’s recent stock performance.

Here’s how many shares you need to buy of Chartwell to meet your passive-income target

This REIT was trading at $8.19 per share in late-morning trading on December 8, 2022. I am going to be using that trading price for this hypothetical. Canadian investors who have the room in their Tax-Free Savings Account (TFSA) should consider making the purchase in that account. This will allow you to churn out passive income completely tax free.

In this scenario, we can buy 2,500 shares of Chartwell REIT for a purchase price of $20,475. This REIT offers a monthly dividend of $0.051 per share. That represents a monster 7.4% yield.

Bottom line

A choppy market is not the only factor holding back Canadian investors. Soaring inflation rates have made life difficult for consumers. Investors who bolster their passive income could offer themselves significant relief in the present environment. The Canada Food Price Report was released this past Monday. It projected that the total annual grocery bill would be $1,065 more than the previous year in 2023.

The purchase of 2,500 shares will allow us to generate monthly passive income of $127.50 going forward. That works out to annual passive income of $1,530. Investors who can gobble up these dividends in a TFSA will get to pocket all that cash. This could pay for a grocery bill price jump in 2023.

COMPANYRECENT PRICENUMBER OF SHARESDIVIDENDTOTAL PAYOUTFREQUENCY
CSH.UN8.192,500$0.051$127.50Monthly

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 Investing

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 »

engineer at wind farm
Energy Stocks

Invest $20,000 in This Dividend Stock for $100 in Monthly Passive Income

This dividend stock has it all – a strong outlook, monthly income, and even more to consider buying today.

Read more »

Hourglass and stock price chart
Stock Market

It’s Not Too Late: Invest in These TSX Growth Stocks Now

Solid fundamentals of these top TSX growth stocks could help them maintain strong upward momentum in the years to come.

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 »

stocks climbing green bull market
Stocks for Beginners

3 TSX Stocks Soaring Higher With No Signs of Slowing

Don't ignore stocks just because they look like they're at a high price. Instead, see exactly why they've driven so…

Read more »

dividends can compound over time
Bank Stocks

Is TD Bank Stock a Buy for Its 5.2% Dividend Yield?

TD Bank stock offers a rare 5.2% dividend yield—can it rebound from challenges and reward contrarian investors? Here's what to…

Read more »

chart reflected in eyeglass lenses
Investing

How Should a Beginner Invest in Stocks? Start With This Index Fund

This Vanguard index fund is the perfect way to start a Canadian investment portfolio.

Read more »

analyze data
Bank Stocks

Is BMO Stock a Buy for its 4.7% Dividend Yield?

Bank of Montreal is up 20% since late August. Are more gains on the way?

Read more »