Want $1,375 per quarter in passive income? 3 TSX stocks that do the job | Daily News Byte

Written by Aditya Raghunath at The Motley Fool Canada

Dividend stocks offer investors a way to create an alternative income stream with a limited amount of capital. If you can identify winning dividend bets over the long term, investors can also benefit from capital gains.

It is imperative to identify companies that have strong balance sheets, solid fundamentals and predictable cash flows. So if you want a passive income stream, these three top TSX dividend stocks can help you earn $2,000 each quarter in dividend income. Let’s see how.

Brookfield Infrastructure Partners

One of the largest pure play infrastructure companies in the world, Brookfield Infrastructure Partners (TSX:BIP.UN) should be at the top of your buy list. BIP was listed on the TSX index back in 2008 and has since returned 1,250% to shareholders after adjusting for dividends. It is currently trading 22% below all-time highs, providing investors with a tasty dividend yield of over 4%.

A recession-proof company, Brookfield’s diversified asset base enables it to generate cash flows through business cycles. It finances capital expenditures with operating cash flows as well as balance sheet debt. Its investments have a stable capital structure, and the company has over $2 billion in committed revolving credit facilities that can be used for acquisitions as well as inorganic growth.

Despite the challenging macro environment, BIP’s dividend payout ratio fell from 75% in Q3 2021 to 67% in Q3 2022.

Analysts following BIP shares expect share prices to rise by as much as 40% over the next 12 months.

Northwest Healthcare

One of the most popular real estate investment trusts (REITs) in Canada, Northwest Healthcare (TSKS:NVH.UN) offers investors a tasty dividend yield of 8.2%. Northwest Healthcare has a broad portfolio of properties located in the Americas, Asia Pacific and Europe. The REIT invests and operates in several growing urban centers providing shareholders with exposure to a variety of asset classes.

The story continues

Its assets include core infrastructure hospitals, specialty hospitals, ambulatory and outpatient centers, rehabilitation centers, specialty clinics and life science assets, among others.

With $10.6 billion in assets under management and a 97% occupancy rate, Northwest Healthcare has more than 2,000 tenants with a weighted average lease term of 14 years.

Bank of Nova Scotia

The final TSX dividend stock on my list is Bank of Nova Scotia (TSX:BNS). It is among the three largest banks in Canada, Chile and Peru, as well as one of the largest banks in Mexico and Colombia. It generates 90% of its earnings from the Americas and has access to multiple emerging markets in developing countries in Latin America.

BNS continues to increase volume and market share in key markets with a focus on technology, risk management and increasing acquisitions. Equipped with a strong balance sheet, BNS shares provide shareholders with a dividend yield of 6.3%.

According to estimates, BNS is forecast to report adjusted earnings of $8.32 per share in fiscal 2023, indicating that it is trading at eight times forward earnings, which is quite cheap.

The Foolish takeaway

As seen in the table above, investing $29,000 in each of these three stocks will help you earn $1,375 in quarterly passive income, resulting in an annual payout of $5,500. If these shares are held in a tax-free savings account, your withdrawals will be sheltered from Canada Revenue Agency taxes.

The post Want $1,375 a Quarter in Passive Income? The post 3 TSX Stocks That Work appeared first on The Motley Fool Canada.

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Fool associate Aditya Raghunath has no position in any of the stocks mentioned. The Motley Fool recommends Bank of Nova Scotia, Brookfield Infrastructure Partners and NorthVest Healthcare Properties Real Estate Investment Trust. The Motley Fool has a disclosure policy.

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