[ad_1]
When looking for stocks that can potentially generate steady income, there is no shortage of options. That is, there are many blue-chip stocks that advertise great returns.
However, an investor looking for solid passive income must choose stocks carefully. This is particularly important given the current economic conditions.
To generate steady income from a stock, that stock must pay a juicy but stable dividend. Therefore, it is vital for investors to ensure that they find stocks with financially sustainable dividends.
After all, a huge return won’t help create long-term income if it’s due to a clean cut. Hence, investors may want to avoid stocks that appear to be too promising on dividends.
Today we will look at two TSX stocks with safe returns that can help generate steady income for investors.
Property of choice
Choice of REIT properties (TSX: CHP.UN) is one of Canada’s largest REITs and specializes in retail property. As of this writing, it is trading at $ 13.57 and has a yield of 5.46%.
While those looking for steady income may appreciate the magnitude of the return, some may wonder if the time is right for a REIT investment.
In general, it is true that REITs are in a bit of a tough spot right now. There has been some exodus of activity in shopping malls, and work-from-home initiatives may be more permanent than initially thought.
However, Choice is different from the typical REIT. It has a strategic partnership with its main tenant, Canada’s largest grocer Loblaw.
As such, it offers far more stability than its peers, and this was shown last year. It was not rocked as hard as other Canadian REITs.
In fact, while most of its peers sport betas above one and payout ratios well above 100%, Choice has a beta of 0.44 and payout ratio of around 37%.
This lends credence to its stability and the fact that its juicy 5.46% yield will be easily sustainable in the future. If you are looking for a REIT that can generate steady income, it is worth checking out.
Scotiabank
Bank of Nova Scotia (TSX: BNS) (NYSE: BNS) is a multinational Canadian banking giant offering a diverse range of financial products and services.
Typically, bank stocks are solid choices for generating steady income. Furthermore, BNS has a proven track record of constant growth over time.
Furthermore, this TSX giant has not failed to pay a dividend for over 180 years. Hence, concerns about stability should be calmed, despite today’s unique challenges.
As of this writing, this constant income star is trading at $ 63.02 and has a yield of 5.71%. Usually when a blue-chip bank stock has a yield close to 6%, it’s a good idea for investors to take note.
With a payout ratio of 64%, the sustainability of that dividend shouldn’t be in question. SNB also has a large financial margin and strong growth prospects in the future.
If you are looking for a banking stock that has a massive but reliable dividend, BNS is definitely a name worth keeping an eye on. It has proven to be a constant income star over time for Canadians.
Constant income strategy
These two TSX stocks both offer investors a way to generate steady income. Their returns are at attractive levels, but more importantly, they are sustainable.
If you are looking to build solid passive income, be sure to keep an eye on these stocks.
Speaking of actions to watch out for …
The 10 best stocks to buy this month
Famous Canadian investor Iain Butler just named 10 stocks for Canadians to buy TODAY. So if you’re tired of reading about other people getting rich on the stock market, this could be a good day for you.
Because Motley Fool Canada offers a full 65% discount off the list price of their best stock picking service, plus a full membership fee refund guarantee on what you pay for the service. Click here to find out how to take advantage of it.
Click here to find out more today!
Silly collaborator Jared Seguin has no position in any of the titles mentioned. The Motley Fool recommends BANK OF NOVA SCOTIA.
Source link
