🧐 ProPicks AI October update is out now! See which stocks made the listPick Stocks with AI

Passive Income: 3 Dividend Stocks to Make Money While You Sleep

Published 2022-03-18, 08:09 a/m
© Reuters.  Passive Income: 3 Dividend Stocks to Make Money While You Sleep
FTS
-

Do you want to make money while you sleep?

If so, dividend stocks are the way to go.

Many ads online promote opportunities to make “passive income,” but the vast majority of them aren’t legit. The best of them require heavy amounts of work, the worst are outright scams.

Dividend investing is the one passive income opportunity that is actually real. You simply invest some money up front and then collect cash payouts for as long as the stock continues paying dividends. It’s one of the best ways to grow your wealth over time. With that in mind, here are three Canadian dividend stocks that can pay you money while you sleep.

Suncor Energy Suncor (TSX:TSX:SU)(NYSE:SU) is a Canadian energy stock with a 4.4% dividend yield. As an integrated energy company, it makes more money as the price of oil rises. This year, the price of oil has generally been going up. In recent weeks it has been going down, but the current prices are still historically high. Because Suncor makes money by selling crude oil and gasoline, it earns handsome profits in market environments like this one. The proof is in the pudding. In its most recent quarter, Suncor delivered:

  • $1.55 billion in net income, up from a loss
  • $1.29 billion in operating income, up from a loss
  • $3.1 billion in adjusted funds from operations (AFFO), up 157%
  • $3.7 billion in net debt reduction
TD Bank The Toronto-Dominion Bank (TSX:TSX:TD)(NYSE:TD) is a big bank stock with a 3.7% yield. This company has a lot of things going for it. It’s Canada’s second-biggest bank, which gives it a strong competitive position. It also has a vast and growing U.S. retail business, the ninth-largest in the United States. TD is about to become the sixth-biggest U.S. bank with its upcoming acquisition of First Horizon Corp. The First Horizon acquisition will provide TD with billions in new interest bearing assets. It may increase TD’s dividend paying ability over the long run. Additionally, TD has a strong dividend growth track record, having increased its dividend by about 9% annualized over the last five years.

Fortis Fortis Inc (TSX:TSX:FTS)(NYSE:FTS) is a utility stock that yields about 3.6% at today’s prices. That’s not the highest yield on earth, but it has a lot of potential to grow over time. Fortis has increased its dividend every year for the last 47 years. That’s one of the best dividend growth track records on the TSX. And it should continue into the future. FTS’ management is aiming for 6% annual dividend increases over the next six years, and it has made good on its promises of dividend increases in the past.

Why is Fortis such a reliable company?

Partially, it’s just a function of the utilities industry. Utilities are essential services. People don’t stop using heat and light in recessions. They might use them less, but they won’t cut them out entirely. This is in contrast to discretionary goods which take a real dip in recessions. In contrast to more discretionary services, Fortis enjoys high revenue stability. All utilities have this advantage. But Fortis is a more ambitious utility than most, having grown its business consistently over the decades through acquisitions.

The post Passive Income: 3 Dividend Stocks to Make Money While You Sleep appeared first on The Motley Fool Canada.

Fool contributor Andrew Button owns The Toronto-Dominion Bank. The Motley Fool recommends FORTIS INC.

This Article Was First Published on The Motley Fool

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.