Got $10,000? Create $231 in Passive Income Each Quarter Starting Today!
Written by Amy Legate-Wolfe at The Motley Fool Canada
There are many investors these days just simply sitting on cash. Cash that could be put to work! And if you have some cash set aside for emergencies, and if you’re young, that means you have tons of time ahead of you to invest that money while the market is down — especially if you decide to consider passive-income stocks.
Finding a great dividend stock could turn $10,000 today into massive returns tomorrow. That’s especially when you couple that investment with the dividends produced. You can choose to reinvest those dividends or use it to fund your household during the recession.
But the best part? Your investment will continue to climb after the recession is done. By the end of this year, you’ll be sitting on loads of cash that’s only going to climb higher — especially if you choose this quarterly passive-income stock today.
A solid quarterly dividend stock
When I say solid, I mean there is a quarterly dividend stock that has decades of growth behind it. That growth is through both dividends and returns. And the stock I would choose for passive income each quarter on the TSX today is Fiera Capital (TSX:FSZ).
Fiera stock is a solid choice, as it’s been around for decades. Not only that, but it’s increased its dividend each year for over 25 years. That puts it in the category of Dividend Aristocrat! That’s despite being in the financial sector, which can be a very tricky one during recessions — especially one like Fiera stock, which invests in value and growth stocks.
However, management has proven time and again that they know exactly what they’re doing. They’ve made smart investments that continue to grow revenue, producing more opportunities along the way. And yet the company is still valuable! So, let’s look at what you could get if you pick up the passive-income stock today.
Value for dividends
First, let’s look at the company’s amazing dividend yield. Fiera stock currently offers a yield at 9.19% as of writing. That’s insanely high, but it’s something that the company has managed to grow and support for years. In fact, during the last decade along the company has increased its dividend by a compound annual growth rate (CAGR) of 10.39%!
Meanwhile, the company still offers some value to investors. Fiera stock trades at 16.96 times earnings, with is just out of value territory, and shares are up just 1% in the last year. There could be another dip on the way with a recession though, so if you’re patient, you could decide to wait it out.
And you do have some time. The next dividend isn’t due until April, so it’s not like you’ll be missing out on dividends while you wait. This gives you time to do your own research to figure out whether Fiera stock is right for you.
What you’d lock in on the TSX today
That being said, let’s look at what you could lock up on the TSX today should you decide to invest that $10,000 right now. You’ll be receiving quarterly income, sure. But you’ll also be looking at returns from share increases as well.
Those increases may not come immediately, but Fiera stock will certainly recover. In fact, over the last 20 years, shares are up 157%. That offers up a CAGR of 7.9% for today’s investor. So, let’s say you see your shares return to 52-week highs; let’s see what your portfolio could be with the table below.
COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
FSZ: Now | $9.30 | 1,075 | $0.86 | $231.25 | Quarterly | $10,000 |
FSZ: 52-week highs | $10.77 | 1,075 | $0.86 | $231.25 | Quarterly | $11,577.75 |
As you can see, if you were to see your 1,075 shares from a $10,000 investment return to 52-week highs, that would create a portfolio worth $11,577.75! Plus, you can add on $231.25 each quarter, or $925 each year. That’s a total portfolio of $12,502.75!
The post Got $10,000? Create $231 in Passive Income Each Quarter Starting Today! appeared first on The Motley Fool Canada.
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Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends Fiera Capital. The Motley Fool has a disclosure policy.
2023
