Establishing a passive-income stream that can yield $1,000 or more annually is the dream of every investor. And despite what new investors may think, it’s not as hard as you may think.
Here’s a look at how you can establish that passive-income stream to yield $1,000 or more each and every year.
Keep in mind that prospective investors should note the importance of diversifying their portfolios, and that a yield of $1,000 or more will take time.
So, what stocks should you invest in to yield $1,000 or more?
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Let’s start with a big bank
Canada’s big banks are great long-term investments. They boast both a stable domestic market at home as well as a growing international presence in the United States. Adding to that appeal, they also provide a generous quarterly dividend. In many cases, that dividend has been paid out without fail for nearly two centuries.
The big bank for investors to consider right now is Toronto-Dominion Bank (TSX:TD). Apart from its domestic business, TD enjoys a growing U.S. presence that stretches along the East Coast from Maine to Florida.
That U.S. presence has come under scrutiny lately, as the bank has gotten caught up in investigations pertaining to anti-money-laundering systems. The already announced $450 million charge could be just the beginning of what could be several fines.
So, why invest in TD right now? The stock price has dipped nearly 10% year to date, making it a great discounted option to buy. That dip has also swelled its dividend to a yield of 5.27%.
In short, TD will recover, and long-term investors can enjoy that juicy yield, which will help your portfolio yield $1,000 per year.
Sprinkle in some defensive appeal
Utility stocks are some of the most defensive picks on the market. There’s a good reason for that. They provide a necessary service, which is backed by regulated contracts that can span decades.
The result is a recurring and stable revenue stream that leaves room for growth and a juicy dividend.
In the case of Fortis (TSX:FTS), that yield works out to a respective 4.25%. Even better is that Fortis has provided investors with annual bumps to that dividend going back a whopping 50 consecutive years!
That fact alone makes Fortis a buy-and-forget favourite to help yield $1,000 or more.
Finally, let’s become a landlord
Owning a rental property is a passive income dream shared by many. Unfortunately, that dream has turned into a nightmare lately. Rising downpayment costs and interest rates have priced out many would-be landlords.
RioCan Real Estate (TSX:REI.UN) offers investors another if not more lucrative option. RioCan has a growing portfolio of mixed-use properties located in high-demand corridors of Canada’s metro areas.
Compared with a rental property, investing in RioCan spreads that risk out over hundreds of units. It also doesn’t come with a mortgage, property taxes, or tenant issues!
Perhaps best of all, RioCan pays out distributions on a monthly cadence, just like a landlord collecting rent. As of the time of writing, that yield comes out to a juicy 6.28%. This handily makes RioCan a must-have for any investor looking to generate a yield of $1,000 or more.
Yes, you can get $1,000 or more each year
No stock is without some risk, and that’s why the importance of diversification cannot be understated. Fortunately, the stocks mentioned can provide investors with a healthy and diversified way to reach that income goal.
Here’s how we can collectively reach over $1,100 with just a $7,000 investment across each of the above stocks.
| Company | Recent Price | No. of Shares | Dividend | Total Payout | Frequency |
| Toronto-Dominion Bank | $77.47 | 90 | $4.08 | $367.20 | Quarterly |
| Fortis | $55.56 | 125 | $2.36 | $295 | Quarterly |
| RioCan REIT | $17.67 | 396 | $1.11 | $439.56 | Monthly |
In my opinion, one or all of the above should be core holdings in any well-diversified portfolio.
