A top passive income stock in Canada
To generate stable 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 is built around investing in private companies using structured equity. Instead of relying on the volatility of the public market, it earns distributions from a diversified portfolio of partner companies.
Alaris currently trades at approximately $21.23 per unit and has a market capitalization of approximately $959 million. At this price, the trust offers an annualized dividend yield of approximately 7%, paid out through quarterly distributions. A $10,000 investment at current levels could generate almost $697 per year in passive income.
What the company does and how its shares have performed
Before we delve deeper into the sustainability of earnings, let’s quickly understand how this company generates money. Simply put, Alaris provides capital to private companies in exchange for preferred and common equity interests. This structure allows it to receive recurring distributions while benefiting from positive performance when partners perform well.
Alaris stock has shown solid momentum in recent months and is currently trading less than 2% below its 52-week high. This performance could reflect improved investor confidence in the trust’s cash flow prospects and balance sheet discipline.
Financial trends that support the dividend
In the third quarter of 2025, Alaris reported an 8% year-over-year (YoY) revenue increase to $74.9 million, driven by stronger partner performance and higher unrealized gains on investments.
As a result, adjusted profits rose sharply by 59% year over year to $1.76 per unit. Similarly, the company’s quarterly adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) also rose 33% from a year ago to $70.1 million. These improvements were driven by higher partner distributions and improved valuation of multiple investments.
Although Alaris Equity posted a year-over-year decline in net distributable cash flow in the latest quarter due to the timing of joint distributions and higher transaction costs, underlying partner cash flows were still stable.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | INVESTMENT | DIVIDEND PER SHARE (QUARTER) | ANNUAL PAYMENT |
| Alaris Equity Partners Income Trust | $21.23 | 471 | $9,999 | $0.37 | $697.1 |
| Prices as of January 8, 2026 |
Why long-term income investors may find this attractive now
What makes Alaris attractive to passive income seekers is not only its returns, but also 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 its long-term revenue commitments. Recently, the net book value reached a record $25.10 per unit, well above the current trading price. This gap could provide an additional margin of comfort for income-oriented, long-term investors.
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