For $1,000 in Monthly Passive Income, Buy 1,000 Shares of This TSX Stock

You could make $1,000 right now every month, or have a bit of patience and have the same amount down the line for far less upfront.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The weather last week in Ontario was like a sick April Fool’s prank. Just when we thought we’d perhaps have some gorgeous weather, no. We’re settled back into a horrible cold that chills to the bone. All while trying to put enough cash aside so that we can finish off our taxes, and move on.

But move on to what?

This year has already been hard financially, and it’s likely only going to get harder. Economists continue to predict that Canadians will see a mild recession by summer. While this could mean we don’t see the 40% drop in the market as we did during the Great Recession, it’s a sting already on top of a bruise and a gash from the year before.

So to prepare, it’s a great time to move on to some monthly passive income. And there are two ways to go about that for $1,000 per month.

First, the stock

There are numerous stocks out there that provide passive income. But when you want passive income on a monthly basis, and what’s more from a strong company, the list gets shorter. Even so, there are certainly some to consider on the TSX today.

Created with Highcharts 11.4.3First National Financial PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

A top choice might be First National Financial (TSX:FN), which currently provides a monthly dividend at 6.42%. The $2.2-billion company is in the mortgage business, which hasn’t been doing so well during this period of high interest rates. Yet, that means it offers value for investors today.

First National trades at just 11.5 times earnings as of writing, with shares down 7.5% in the last year. Yet, in the last decade, shares are up 107%! And at a fairly steady pace, too. So with a high dividend yield on a monthly basis, this is certainly one to consider on the TSX today.

Option 1: Invest for $1,000 per month today

If you want $1,000 per month, every month, starting right now, it’s going to cost you. That’s the case no matter what you invest in. Yet, if this is something you can afford, by all means!

The only point I want to make is that you should discuss such a choice with your financial advisor. They will help you create a diverse, conservative, long-term portfolio that will see your portfolio rise steadily over time.

Still, if you have the cash set aside for riskier investments, then this could be the way to go. Here is how much it would take to create $1,000 per month today with First National stock.

COMPANYRECENT PRICENUMBER OF SHARESDIVIDENDTOTAL PAYOUTFREQUENCYTOTAL PORTFOLIO
FN$37.255,000$2.40$12,000monthly$186,250

As you can see, it would cost you a pretty penny at $186,250 to gain $12,000 per year, or $1,000 per month right now.

Option 2: Have a touch of patience

There is still another way to create $1,000 per month – you simply have to have a bit more patience. You can eventually reach $1,000 per month, or $12,000 per year, from First National stock by looking at its historical performance.

Shares are up 107%, which is a compound annual growth rate (CAGR) of 7.5% in the last decade. Its dividend is up 71%, posting a CAGR of 5.5% during that time. So, let’s say you have $37,250 to put into 1,000 shares today. You then go ahead and add $4,000 each year.

YearShares OwnedAnnual Dividend Per ShareAnnual DividendAfter DRIP ValueAnnual ContributionYear End Shares OwnedYear End Stock PriceNew Balance
11000.00C$2.39C$2,391.45C$39,713.09C$4,000.001161.45C$40.03C$46,495.66
21161.45C$2.52C$2,925.86C$49,507.40C$4,000.001324.42C$43.02C$56,980.63
31324.42C$2.65C$3,514.59C$60,596.30C$4,000.001489.13C$46.24C$68,852.75
41489.13C$2.80C$4,162.69C$73,132.75C$4,000.001655.76C$49.69C$82,276.05
51655.76C$2.94C$4,875.65C$87,286.33C$4,000.001824.49C$53.40C$97,432.36
61824.49C$3.10C$5,659.38C$103,244.86C$4,000.001995.46C$57.39C$114,523.05
71995.46C$3.27C$6,520.25C$121,216.17C$4,000.002168.83C$61.68C$133,771.04
82168.83C$3.44C$7,465.17C$141,430.14C$4,000.002344.72C$66.29C$155,422.84
92344.72C$3.63C$8,501.56C$164,140.80C$4,000.002523.25C$71.24C$179,750.89
102523.25C$3.82C$9,637.42C$189,628.70C$4,000.002704.51C$76.56C$207,056.09
112704.51C$4.02C$10,881.37C$218,203.42C$4,000.002888.61C$82.28C$237,670.51

It would take just 11 years to reach over $12,000 in annual passive income, $1,000 per month, from dividend reinvestment!

Should you invest $1,000 in First National Financial Corporation right now?

Before you buy stock in First National Financial Corporation, 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 First National Financial Corporation 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 $20,697.16!*

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 29 percentage points since 2013*.

See the Top Stocks * Returns as of 3/20/25

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 Amy Legate-Wolfe 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.

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

Blocks conceptualizing Canada's Tax Free Savings Account
Dividend Stocks

The 1 Canadian Stock I’d Buy and Hold Forever in a TFSA

This Canadian stock is a strong option for any TFSA, and here's why.

Read more »

Man holds Canadian dollars in differing amounts
Dividend Stocks

Invest $25,000 in These Dividend Stocks for $1,267 in Annual Passive Income

Dividend stocks are strong options, but these two could be some of the best long-term options.

Read more »

investor looks at volatility chart
Dividend Stocks

I’m Adding This 12% Dividend Stock for a Recession-Resistant Portfolio

Despite boasting such a high dividend yield, this 12% dividend yield stock might be an excellent pick to build your…

Read more »

Make a choice, path to success, sign
Dividend Stocks

1 Undervalued TSX Stock Down 51% to Buy and Hold

This TSX stock plunged, but don't count it out, especially at these prices.

Read more »

dividends can compound over time
Dividend Stocks

How I’d Invest $50,000 of TFSA Cash in 2025

If you have $50,000 to invest in a TFSA, here's how to get started.

Read more »

analyze data
Dividend Stocks

Why I’d Focus on Canadian Value Stocks for My Long-Term Portfolio

Canadian value stocks often provide income and growth that makes them great for long-term investing.

Read more »

woman looks at iPhone
Dividend Stocks

Investing $7,000 in Your TFSA? Consider These 2 Canadian ETFs for Retirement Planning

These two Canadian ETFs can be excellent long-term investments to add to your TFSA if you have contribution room available.

Read more »

ways to boost income
Dividend Stocks

Where I’d Invest $5,000 in Canadian Value Stocks During This Market Pullback

For patient, long-term investors, here are three discounted TSX stocks to have on your watch list right now.

Read more »