How I’d Invest $1,000 Right Now to Create Passive Income for Life

Written by Amy Legate-Wolfe at The Motley Fool Canada

Now is one of the best times in recent history to invest in strong passive-income stocks for life-long income. Yes, I get it; the TSX is not doing so hot right now. Stocks have taken a sharp drop; the TSX is down 12.3% year to date at the time of writing this article.

But the TSX has fallen before, and it will rise again.

With that in mind, there are passive income stocks out there that provide an astounding deal — one that long-term investors simply shouldn’t pass up. So, with that in mind, if you have $1,000 you’re looking to invest, these are my top choices.

Canadian Utilities

Canadian Utilities (TSX:CU) only recently saw shares drop back during the last month with the rest of the market. News that a recession is likely in 2023, along with inflation and interest rate data from the United States, sent shares into a free fall. Up until that point Canadian Utilities stock had been doing incredibly well, up 17% in 2022 by the end of August!

However, September saw that change, and it has not yet recovered in October. So, now is the time to pick up this Dividend King before a recovery. Yes, it’s a Dividend King, meaning it’s increased its dividend each year for the past 50 years! What’s more, it’s still the only one with this status.

So, with shares down 18% from 52-week highs, trading at 16.4 times earnings, and a 5.15% dividend yield, this is certainly where I’d put some of my $1,000.

Teck Resources

Another strong choice is Teck Resources (TSX:TECK.B). The difference in Teck stock from other passive-income stocks and metals stocks, is that Teck focuses on materials that do something. This is key, according to Warren Buffett. While gold is mostly pretty, silver, copper, coal, and other products are necessities — ones we need for plumbing, electricity, steel, and more.

These are what Teck stock invests in, and the company has been doing quite well, even in this interest rate high and inflationary environment. In fact, during the last quarter, it reached a record $1.8 billion in profit for the fourth consecutive quarter! These earnings estimate-beating results have led to the company seeing shares up 60% by June.

However, since then shares have taken a hit, coming down 41% by July and now down 22% since that time. In the last three months alone, it’s seen a climb of 30% for investors to latch onto, even as the market falls. So, you can pick up a 1.09% dividend yield for passive income and strong returns, while it trades at just 4.37 times earnings.

Brookfield Infrastructure

Finally, infrastructure remains a necessary part of the economy as well. That’s why Brookfield Infrastructure Partners (TSX:BIP.UN) is another passive-income stock to consider with your $1,000.

Brookfield invests in everything from water and sewage to renewable energy and oil. It has locations around the world and continues to expand mainly through acquisitions. Yet even with this solid long-term path to growth, it’s seen shares drop in the last few months.

Brookfield stock has come down 8.5% year to date and 18% in the last month alone. So, now is a prime time to pick it up, as it could be a great choice if you’re looking for a quick rebound when the market starts to recover. Meanwhile, you can lock in a dividend yield of 4.26%!

The post How I’d Invest $1,000 Right Now to Create Passive Income for Life appeared first on The Motley Fool Canada.

Just Released! 5 Stocks Under $49 (FREE REPORT)

Stop Trading. Start Investing.

Motley Fool Canada‘s market-beating team has just released a brand-new FREE report revealing 5 “dirt cheap” stocks that you can buy today for under $49 a share.  Our team thinks these 5 stocks are critically undervalued, but more importantly, could potentially make Canadian investors who act quickly a fortune.

Don’t miss out! Simply click the link below to grab your free copy and discover all 5 of these stocks now.

More reading

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends Brookfield Infra Partners LP Units. The Motley Fool has a disclosure policy.


Leave a Reply

Your email address will not be published. Required fields are marked *