If you’re looking to create major passive income this year and beyond, then dividend stocks are certainly the right answer. The thing is, that’s not the only place that investors should be looking when they want passive income. Today, let’s look at what else investors need to consider and a stock to bring in major passive income from $10,000.
What makes passive income
Passive income certainly can come from dividend income, and therefore, a dividend stock can be a strong investment, especially when the market is performing poorly. Dividend income can provide you with income that will come your way even when shares drop.
However, a high dividend yield can also be problematic. It means that this could be a sign that the company could in fact cut its dividend. If a company’s share price drops lower and lower, the yield inevitably rises higher and higher.
That’s why investors should consider both dividend income as well as returns. If shares are climbing, and yet the dividend is still strong, then you’ve got a strong passive income stock. So, that’s why we would also consider TFI International (TSX:TFII) a perfect option.
TFII stock rising higher
TFII stock has been climbing higher and higher — not just in the last year but year to date as well. Shares are currently up 39% in the last year and 22% year to date! And quarterly results certainly had a lot to do with it.
But let’s first go back because it’s not just year-over-year results that’s been setting up TFII stock for success. It’s been quarter after quarter of improvements leading to strong momentum for TFII stock. With first-quarter results due April 25, let’s look back to the last four quarters to see what’s been going on.
The first quarter of 2023 brought in total revenue of US$1.85 billion, with diluted earnings per share (EPS) at US$1.33. The second quarter saw a decrease to US$1.79 billion, with diluted EPS up to US$1.59. By the third quarter, revenue was back up to US$1.91 billion, and diluted EPS was steady at US$1.57. Yet the fourth quarter was the best, with US$1.97 billion in revenue and diluted EPS at US$1.71.
Momentum for more
What this can tell us is that even more momentum should be expected for the next year. In fact, with the first quarter around the corner, it’s likely that this will be the continuation of that story. The company is seeing even more growth in its overall business after a struggle this last year. So, now could be the best time to get in.
So, with that $10,000 on hand, you could see another 39% in share growth come your way — all while collecting a 1.01% dividend yield. Should that happen, here is what investors could bring in.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | PORTFOLIO TOTAL |
| TFII – now | $217 | 46 | $2.17 | $99.82 | quarterly | $10,000 |
| TFII – 39% higher | $301.63 | 46 | $2.17 | $99.82 | quarterly | $13,874.98 |
From this investment, you would receive $3,874.98 in returns and $99.82 in dividend income. That’s a total of $3,974.80 in total passive income! So, always make sure to consider returns beyond just dividend income from dividend stocks.
