Invest $10,000 in This Dividend Stock for $697 in Passive Income

When trying to build passive income, it’s better to focus on cash reliability than short-term price gains. Many investors want income that arrives regularly without constant portfolio adjustments. Even with a $10,000 investment, you can build a solid income stream by targeting high-quality dividend stocks with a consistent payout history and real cash flows. In this article, I will talk about one such top passive-income stock in Canada that combines a strong dividend yield with a business model designed to support consistent distributions.

A top passive-income stock in Canada

To generate steady passive income year after year, the stock needs a business model that prioritizes cash generation and disciplined payouts. And Alaris Equity Partners Income Trust (TSX:AD.UN) fits that profile well. It’s built around investing in private companies using structured equity. Instead of relying on public market volatility, it earns distributions from a diversified portfolio of partner businesses.

Alaris currently trades at about $21.23 per unit and carries a market cap of roughly $959 million. At this price, the trust offers an annualized dividend yield of about 7%, paid through quarterly distributions. A $10,000 investment at current levels can generate close to $697 a year in passive income.

What the business does and how the stock has been performing

Before digging into income sustainability, let’s quickly understand how this company generates cash. To put it simply, Alaris provides capital to private companies in exchange for preferred and common equity interests. This structure allows it to receive recurring distributions while also participating in upside when partners perform well.

Alaris stock has shown solid momentum in recent months, currently trading less than 2% below the 52-week high. That performance could be a result of investors’ improved confidence in the trust’s cash flow outlook and balance sheet discipline.

Financial trends that support the dividend

In the third quarter of 2025, Alaris reported 8% YoY (year-over-year) rise in its revenue to $74.9 million with the help of stronger partner performance and higher unrealized gains on investments.

As a result, its adjusted earnings rose sharply by 59% YoY to $1.76 per unit. Similarly, the company’s adjusted quarterly EBITDA (earnings before interest, taxes, depreciation, and amortization) also climbed 33% from a year ago to $70.1 million. These improvements came from higher partner distributions and improved valuation across multiple investments.

While Alaris Equity posted a YoY decline in its net distributable cash flow in the latest quarter due to the timing of common distributions and higher transaction costs, its underlying partner cash flows still remained stable.

COMPANYRECENT PRICENUMBER OF SHARESINVESTMENTDIVIDEND PER SHARE (QUARTERLY)YEARLY PAYOUTAlaris Equity Partners Income Trust$21.23471$9,999$0.37$697.1Prices as of Jan 8, 2026

Why long-term income investors may find this attractive now

What makes Alaris appealing for passive-income seekers is not just the yield but its long-term structure. The trust increased its quarterly distribution by 9% after the third quarter, bringing its annualized payout to $1.48 per unit.

Meanwhile, the company also continues to deploy capital to new and existing partners, expanding long-term revenue commitments. Recently, its net book value reached a record $25.10 per unit, well above the current trading price. This gap could provide an added margin of comfort for income-focused, long-term investors.

The post Invest $10,000 in This Dividend Stock for $697 in Passive Income appeared first on The Motley Fool Canada.

Should you invest $1,000 in Alaris Equity Partners Income Trust right now?

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* Returns as of January 5th, 2026

More reading

• 3 Dividend Stocks Yielding at Least 5% for Practically Free Monthly Income
• 2 Dividend Stocks Worth Owning Forever

Fool contributor Jitendra Parashar has no position in any of the stocks mentioned. The Motley Fool recommends Alaris Equity Partners Income Trust. The Motley Fool has a disclosure policy.