7 Best Stocks for Passive Royalty Income

Are dividend stocks REALLY passive income? They are if it’s from royalty trusts! These special company structures are almost completely passive and a great way to invest. I’ll reveal the 7 best royalty trust stocks for passive income and what to watch for in this video.

Royalty Trusts are special types of companies set up to hold an income producing asset and then pass all that income on to investors.

Not only do these offer dividend yields well above the market average but there are a lot of other benefits that make these even better than your traditional dividend stocks.

These companies usually buy assets like an oil field or a gold or copper mine. The exploration company gets a one-time payment for a percentage share of the production. The company continues to manage the asset, so drilling for oil on the fields or mining the gold reserves. Royalty trusts have no employees, it’s just a financial account that receives the percentage share from the exploration company and passes it on to investors.

And because the structure is so simple here, there’s really no financial statements to analyze. There aren’t any of the accounting tricks other companies use to make revenue look bigger or expenses smaller, it’s just one income producing asset and the distributions.

https://uraniumroyalty.com
TSX-V:URC | NASDAQ:UROY
Check out the investors’ presentation here https://www.uraniumroyalty.com/_resources/presentations/corporate-presentation.pdf?v=0.960

The big upside to trusts is the higher dividend yield compared to other income stocks. For example the Schwab Dividend ETF, ticker SCHD, is one of the stronger dividend funds but only pays a 3.6% yield. Even the Vanguard Real Estate Fund, ticker VNQ, which owns those income-producing REITs only pays a 4% yield.

With royalty trusts, you not only get a higher dividend, usually around 5% and higher but most of that isn’t taxable. We’ll talk more about taxes on royalty trusts later but these have a great hidden tax break where you only pay taxes on the investment after you sell it instead of yearly on those dividend payments.

Another upside here is that, because these trusts are a special type of company, they don’t pay corporate taxes on income …it’s just a much more efficient way to hold these assets compared to other companies like an Exxon or Chevron. Royalty Trusts are able to distribute nearly all their income instead of having to pay for operational costs and taxes.

Join the Community for extra perks and access! Check out these member extras
✅ Instant Buy/Sell Notifications and Stock Ideas
✅ Stock Split and IPO Alerts
✅ Monthly Live Q&A
✅ …MORE!
https://mystockmarketbasics.com/BowTieMember

🤑 Get The Weekly Bow-Tie – my FREE weekly email newsletter sharing market updates, trends and the most important news! Market Updates for the Smart Investor! https://mystockmarketbasics.com/dailybowtie

My Investing Recommendations 📈

Check out the stock simulator and Get six FREE shares of stock worth up to $10,000 when you open a Webull investing account with any deposit! 🤑 https://mystockmarketbasics.com/webull

📊 Download this Portfolio Tracker and Investing Spreadsheet! [Community Discount Code] https://mystockmarketbasics.com/spreadsheetdiscount

✅ FREE Report! See the top five stocks in my portfolio, the five stocks I’m buying for the next 30 years! https://mystockmarketbasics.com/motleyfool

✅ Save $120 and get 50% off Premium Access to the largest investment analysis community in the world! Lowest price online for Seeking Alpha premium access! https://mystockmarketbasics.com/SeekingAlphaDiscount

Joseph Hogue, CFA spent nearly a decade as an investment analyst for institutional firms and banks. He now helps people understand their financial lives through debt payoff strategies, investing and ways to save more money. He has appeared on Bloomberg and on sites like CNBC and Morningstar. He holds the Chartered Financial Analyst (CFA) designation and is a veteran of the Marine Corps.

This video was conducted on behalf of Uranium Royalty Corp, and was funded by Gold Standard Media LLC and/or affiliates. For our full disclaimer, please visit: https://portal.goldstandardir.com/disclaimer/URC-40