Dividend Seekers: Invest $10,000 Today and Start Earning $80 From Next Month Onwards

It is a once-in-a-decade opportunity for dividend seekers to earn an extra $20/month from $10,000. Let’s see how.

| More on:

Image source: Getty Images

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 market is bearish on several dividend stocks amid high interest rates. Last year, many dividend-paying companies slashed their payouts or restructured. The Dividend Aristocrats also slowed their dividend growth rate. All this happened as a rapid and significant surge in interest expense reduced their free cash flow used to pay dividends. You can’t blame them. Many Canadians with a mortgage also felt the heat of rising interest expenses. 

Amid this high interest rate, two dividend stocks maintained their calm and kept their dividend-payout ratio at healthy levels. 

Timbercreek Financial: 8.89% dividend yield 

Created with Highcharts 11.4.3Timbercreek Financial PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

Who would benefit from the rising interest rate? The one who earns it. And Timbercreek Financial (TSX:TF) has been earning high-interest income throughout 2023. In the fourth quarter, it had a loan portfolio of $946.2 million with a weighted average interest rate of 10%. Since Timbercreek Financial offers short-term loans to commercial real estate borrowers, it has a higher turnover ratio. 

However, high interest rates slowed the turnover ratio to 44.9% in 2023 and 39.8% in 2022, from 65.4% in 2021 and 57% in 2020, when interest rates were near zero. The turnover ratio is the percentage of total loans borrowers repay. A higher ratio frees up capital for TF to lend it again and earn higher processing fees. The lender saw an increase in stage two and three loans, but higher interest income offset the risk. When interest rate cuts are announced later in 2024, TF could see a surge in loan turnover, paving the way for higher processing fees. 

The lender has reduced its payout ratio to 86.7% in 2023 from 135.9% in 2021, hinting that it can continue to pay dividends. At present, the stock is down 18% from the time when the interest rate hike began. It is an opportune time to buy the dip and lock in an 8.89% annual yield for years. 

Slate Grocery REIT: 10.37% dividend yield 

Created with Highcharts 11.4.3Slate Grocery REIT PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

Another way to earn a monthly passive income is through rent, and what better tenant than a grocer? You rarely see your neighbourhood grocery store replaced by a clothing or electronics store. The nature of the grocery business is resilient. They are sticky and act as an anchor that pulls other stores. And Slate Grocery REIT (TSX:SGR.UN) is leasing its stores to these sticky tenants. 

The real estate market has been in a slump as higher mortgage rates reduced demand and pulled down real estate prices. The unit price of a real estate investment trust (REIT) reflects the value of its property portfolio. While the occupancy was high and leases were renewed at a 10% higher rent, the fair market value of properties dipped and affected Slate’s net profit. That explains the 32% dip in its unit price since the interest rate hike began.

If you know properties, they always appreciate in the long term. Those who bought property in the 2009 Financial Crisis enjoyed significant gains in the 2020 decade. Now is a good time to buy this REIT at the dip and lock in a 10.37% annual yield. 

How to start earning $80 from next month onwards 

The above stocks are available at attractive discounts. If you invest $5,000 each in the two stocks, you can buy 641 shares of TF and 443 units of Slate Grocery REIT. These shares can give you a combined dividend of $79.94. (Look at the table below). 

DetailsTimbercreek FinancialSlate Grocery RFEITTotal
Stock Price$7.80$11.28 
Monthly Dividend Per Share$0.0575$0.09720 
Invested Amount$5,000$5,000$10,000.00
No. of Shares641443 
Monthly Dividend$36.86$43.09$79.94
Yield0.74%0.86%0.80%
How to earn $80 per month from a $10,000 investment.

Suppose you invest in the above two stocks in a normal market, where TF stock trades at $9.5 per share, and Slate Grocery REIT at $16.6, a $10,000 investment would buy you 526 and 301 shares, respectively. Since their dividend per share remains unchanged, you would earn $59 in monthly dividends. 

The current discounted stock price can earn you an extra monthly dividend of $20. 

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

Before you buy stock in Crescent Point 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 Crescent Point 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 $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 Puja Tayal has no position in any of the stocks mentioned. The Motley Fool recommends Slate Grocery REIT. 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

A worker overlooks an oil refinery plant.
Dividend Stocks

3 High-Yield Canadian Stocks I’d Consider for a $5,000 Investment

These three dividend stocks are excellent additions to your portfolio, given their healthy cash flows and high yields.

Read more »

Blocks conceptualizing Canada's Tax Free Savings Account
Dividend Stocks

How I’d Use My TFSA to Invest in Canadian Value Stocks for Long-Term Wealth

TFSA investors can mitigate bearish trends by shifting to value stocks that can deliver long-term wealth.

Read more »

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

TFSA ‘Forever Holdings’: 4 Canadian Stocks for Sustained Tax-Free Growth

Add these four TSX dividend stocks to your self-directed TFSA portfolio to generate tax-free passive income for decades.

Read more »

Beware of bad investing advice.
Dividend Stocks

Where I’D Invest $1,000 in 3 No-Brainer Canadian Stocks Under $150

Want to invest $1,000 in some great stocks? Here's a trio that investors can buy at a discount right now…

Read more »

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 »