" >Generate Over $1100 in Monthly Passive Income With a $100000 Investment - The Motley Fool Canada | Canada News Media
Connect with us

Investment

Generate Over $1100 in Monthly Passive Income With a $100000 Investment – The Motley Fool Canada

Published

on


What if there were an easy way to generate over $1,000 a month in passive income? This payout can contribute towards the payment of utilities, a part of your mortgage, or even a vacation.

No, I am not talking about buying an expensive property that can be rented out for $1,000 every month. Bonds are also out of the question, as yields are between 1% and 2.5%, and you would require in excess of $500,000 for a $1,000 monthly payout. Even real estate investment trusts (REITs) have an average dividend yield of around 5%.

There is an opportunity to invest in high-dividend-yielding stocks. The energy and chemical sectors in Canada are in the midst of a multi-year slump, which means stock prices of several companies have been decimated in recent times. This has resulted in high dividend yields, which can be attractive, especially considering the mouth-watering prospect of capital gains in case the share price bounces back.

Vermilion Energy

Vermilion Energy (TSX:VET)(NYSE:VET) is a Canada-based international energy company. It focuses on conventional and semi-conventional exploration development projects. Vermilion is interested in light oil and liquids-rich natural gas. It manages the acquisition, exploration, development, and optimization of producing properties in North America, Australia, and Europe.

Vermilion sales rose from $894 million in 2016 to $1.67 billion in 2018. However, analysts expect sales to rise by 11.9% to $1.71 billion in 2019 and then fall 3.5% to $1.65 billion in 2020. This deceleration in revenue growth has meant shares have fallen by a considerable 40.6% in the last 12 months compared to the S&P 500 gains of 23.7%. In the last five years, Vermilion investors have lost a massive 68%.

The decline has meant Vermilion stock has a forward dividend yield of 14.6%. So, an investment of $50,000 in the stock will generate annual dividend payouts of $7,300. Is Vermilion’s high dividend yield sustainable?

The company has a debt balance of $2.05 billion and cash reserves of $10.23 million. With operating cash flows of $782 million, it can easily service debt obligation and continue to pay dividends.

Chemtrade Logistics Income Fund

Chemtrade Logistics Income Fund (TSX:CHE.UN) provides industrial chemicals and services. It generates over 60% of revenue from the United States, around 30% from Canada, and the rest from South America.

As the name suggests, the stock is structured as an income fund. This means investors can expect a monthly dividend payout. The company has been paying monthly dividends since 2001.

Despite the volatility in the chemical sector, Chemtrade has managed to sustain a five-year dividend yield of 8.1%. Now driven by a 26% decline in stock price, the company’s forward yield stands at a massive 13.5%.

Chemtrade has a debt balance of $1.54 billion and with operating cash flow of $158.67 million, it can continue to pay dividends to shareholders.

Analysts covering Vermilion and Chemtrade are bullish about the companies. The average price target estimate for Chemtrade stands at $11.53, which is 31.3% higher than the current trading price. Comparatively, Vermilion stock is trading at a discount of 29.4% to consensus target estimates.

It is not advisable to allocate $100,000 to two beaten-down stocks that might slide further. However, income investors can use this information as a starting point to build a robust portfolio of income-generating investments, which will result in stable and recurring cash flows over the long term.


Fool contributor Aditya Raghunath has no position in any of the stocks mentioned.

Let’s block ads! (Why?)



Source link

Continue Reading

Investment

Investment advisors worry U.S. response to coronavirus is too little too late – National Post

Published

on


NEW YORK — Investment-advisors are increasingly worried that U.S. authorities are not be doing enough to prevent a widespread outbreak of coronavirus in the country, potentially adding further downside to already-battered markets.

Their criticisms include the number of people so far tested by the U.S. Centers for Disease Control and Prevention (CDC), which some say is too small, the possible difficulties of imposing lockdowns on U.S. cities and concerns that the White House could bungle containment efforts.

The worries have magnified the uncertainty that has accompanied the coronavirus outbreak over the last several weeks, as investors scramble to adjust their portfolios to price in the virus’ potential for damage to the global economy and assess its further impact on asset prices.

The CDC states on its website that “as of Feb. 24, CDC teams are working with the Department of Homeland Security at 11 airports where all flights from China are being directed to screen travelers returning to the United States, and to refer them to U.S. health departments for oversight of self-monitoring.”

U.S. Health and Human Services (HHS) Secretary Alex Azar said as of Thursday morning the CDC had tested 3,625 specimens for the fast-moving virus.

For some investors and analysts, those assurances ring hollow.

“Much of what we’ve seen about this virus has shaken confidence in governments,” said James Bianco, head of Chicago-based advisory firm Bianco Research.

His list includes doubts over China’s accuracy in counting cases, criticism over Japan’s handling of a cruise ship quarantine at one of its ports, and the comparatively small number of people that U.S. authorities have so far tested.

Worries over the growing number of cases outside China sent the S&P 500 into intraday correction territory on Thursday morning. Stocks took an earlier hit on Wednesday after health officials in Nassau County, New York, said they were monitoring 83 people who visited China and may have come in contact with the coronavirus. Governor Andrew Cuomo said the state has had no confirmed cases so far.

On Wednesday evening, U.S. President Donald Trump told Americans that the risk from coronavirus remained “very low,” and appointed Vice President Mike Pence to run the U.S. response to the looming global health crisis.

Bianco said he fears many investors are still complacent about how quickly the number of cases could multiply in the United States, as it has in countries such as Iran, Italy and South Korea.

He is advising his clients to tread lightly until the full extent of the outbreak is known.

“I would rather risk a lost opportunity by being out of the market or underweight and finding out that this is not a big deal, than being fully invested and worrying that this will get worse,” Bianco said.

‘TREMENDOUS AMOUNT OF RISK’

Others are concerned over the consequences if the United States were forced to implement a lockdown similar to the one imposed by Chinese authorities on Hubei Province, the epicenter of the coronavirus outbreak.

Wuhan, Hubei’s capital, imposed strict controls on movement of residents, then eased them, then later announced that the relaxation had been revoked. Such measures could be more difficult to enforce in the United States.

“Those of us sitting here in Hong Kong looking at financial markets think there is a tremendous amount of risk in the system,” said Simon Powell, equity strategist at Jefferies in Hong Kong.

Powell is particularly worried that there could be spread of the virus from people from countries outside China which were not subject to travel restrictions coming into the United States. He is particularly concerned about the outbreak in Iran.

Iran said on Thursday that its coronavirus death toll had risen to 26, by far the highest number outside China. The death rate among confirmed cases of the virus has been running at around 10% in Iran compared to around 3% elsewhere.

Powell also thinks that a Trump government is unlikely to choose reduced economic activity , writing in a recent research note that “our base case hypothesis is that a Trump government is unlikely to choose reduced economic activity, and supply chain disruption, so spread of the virus, if it were to emerge in the US, would be more likely.”

Others have pointed to what they believe are shortcomings in the CDC’s approach.

“The initial response from the U.S. has been targeted to mount a response to confirmed high-risk or infected cases, not directed to a more generalized public health containment,” said Wouter Jongbloed, head of policy and risk analysis at New York-based Exante Data.

With coronavirus having spread well outside China, CDC testing was “likely insufficiently effective in preventing a potential outbreak in the U.S.,” Jongbloed said. (Reporting by Megan Davies; Additional reporting by Ira Iosebashvili; Editing by Daniel Wallis)

Let’s block ads! (Why?)



Source link

Continue Reading

Investment

Pro-Biden super PAC plans Super Tuesday investment as former vice president starts a comeback – CNBC

Published

on


Democratic presidential hopeful and former Vice President Joe Biden in Las Vegas, Nevada on February 22, 2020.

RONDA CHURCHILL

A political action committee backing Joe Biden’s run for president has decided to invest in key Super Tuesday states as they pick up wealthy financiers in the wake of what appears to be a comeback for the former vice president.

In the wake of Biden’s successful debate, and a separate town hall in South Carolina, Unite the Country, a pro-Biden super PAC, has seen a surge in high dollar contributions from donors, one of its leaders told CNBC on Thursday. That’s allowed the organization to invest into delegate rich primary states that are set to take place on Super Tuesday, which is scheduled for March 3. The PAC will first target voters in Alabama and North Carolina with radio and digital ads.

“We’ve done very well in terms of the response with everything that’s happened the last couple of weeks,” Larry Rasky, the group’s treasurer, told CNBC. “I would say things are starting to resonate with donors,” he said, while pointing to Biden’s debate and town hall performances as two reasons why donors are writing big checks to the PAC. Rasky noted that a new poll in the key state of Florida, which shows Biden surging ahead of former New York mayor Mike Bloomberg, also peaked interest from donors.

Bloomberg was, at first, slowly picking up some of Biden’s top fundraisers, but since his sluggish debate performance in Nevada two weeks ago, many of those people have decided to shift back into the former vice president’s corner and give to the super PAC instead, according to a person with direct knowledge of the matter. The PAC has also started to acquire donors who were backing other primary contenders, this person noted.

Rasky would not say how much they are investing into the states or the amount they have raised but noted that they plan to focus more of their resources toward other Super Tuesday states. Contrary to campaigns, super PACs can raise and spend an unlimited amount of money. In January, the pro-Biden PAC raised just over $4 million and spent $3.8 million, according to a Federal Election Commission filing. Their recent fundraising success was on the backs of business executives such as Silicon Valley investor Reid Hoffman, who contributed $500,000 last month, along with Blackstone executive, John McCormick.

The move by the super PAC comes as Biden is looking to pick up his first primary victory in South Carolina and trying to find momentum into next week’s Super Tuesday contests. Sen. Bernie Sanders has become the Democratic primary frontrunner after seeing victories in New Hampshire and Nevada.

The Biden campaign launched a separate six figure ad buy that will include broadcast spots in Alabama, Arkansas, Georgia, North Carolina, Tennessee, Texas and Virginia.

Biden is looking to overtake Sanders while he continues to lead in most polls and in the delegate count. A Real Clear Politics polling average has Biden in second behind Sanders, followed by Bloomberg, Sen. Elizabeth Warren and former mayor Pete Buttigieg.

Let’s block ads! (Why?)



Source link

Continue Reading

Investment

Ottawa-based real estate investment group looking to build retail space behind LCBO – mybancroftnow.com

Published

on




If you have gone to the LCBO recently, you might have noticed the large sign out front touting the future development of an 8,000 square foot retail space.

Director of Leasing for Properties Group Bruce Barrett’s name and phone number are listed on the sign. He tells the MyBancroftNow.com newsroom the Ottawa-based real estate investment and management firm wants to bring in two, maybe three retailers to occupy the space. “Because of the proximity of our site to the neighbouring tenants of Canadian Tire and the LCBO, there has been a little bit of interest,” he says. Barrett adds that Bancroft being a popular destination for cottagers has also helped build interest in the future retail space.

Barrett says they are looking to bring in “traditional” retail or services, not a restaurant. “Simply because of the structure of the centre,” he explains. “We don’t have the capacity to handle a sit-down restaurant.” He says that’s due to the well and septic system set-up at the lot.

He says they have gotten calls from interested businesses, noting he is in conversation with one group interested in taking up 4,000 square feet for retail space. Barrett isn’t able to name the businesses but says they have talked to national retailers about occupying space on the lot. He says they’re also in talks with some “service-oriented” groups. No calls have come in from any locals looking to set-up shop.

“The ideal plan is two tenants with 4,000 square feet each,” Barrett explains.

“I would love to tell you we have something locked in, but we have nothing at the moment,” he says. Barrett says their goal is to have something starts by 2021, or early 2022. “If we were able to lock down a lease this year, finish our planning and go through those stages and go on to construction it would be an 18-to-22 month curve,” he explains.

Let’s block ads! (Why?)



Source link

Continue Reading

Trending