If you’re interested in adding a monthly dividend stock to your portfolio, or are looking to build a portfolio full of them, then this article is for you. I’ve scoured the market and selected three stocks from different industries that have high and safe yields up to 6.6%, so let’s take a quick look at each to determine if you should buy one or all of them today.
1. Morguard Real Estate Investment Trust
Morguard Real Estate Inv. (TSX: MRT.UN) is a diversified REIT with a portfolio of 50 retail, office, residential, industrial, and hotel properties in Canada and the United States. It pays a monthly distribution of $0.08 per share, or $0.96 per share annually, which gives its stock a yield of about 6.6% at today’s levels.
Investors should also note that Morguard has maintained its current annual distribution rate since 2013, and I think its consistent funds from operations, including an adjusted $1.28 per share in fiscal 2015, and its modest payout ratio, including 75% in fiscal 2015, could allow it to continue to do so for the next several years.
2. Pizza Pizza Royalty Corp.
Pizza Pizza Royalty Corp. (TSX: PZA) is the largest pizza restaurant chain in Canada with 730 locations across the country under its Pizza Pizza and Pizza 73 banners. It pays a monthly dividend of $0.0697 per share, or $0.8364 per share annually, which gives its stock a yield of about 6% at today’s levels.
It is also important to make two notes.
First, Pizza Pizza has raised its annual dividend payment for four consecutive years, and its recent increases, including its 2.5% hike in November 2015, has it on pace for 2016 to mark the fifth consecutive year with an increase.
Second, the company has a target dividend payout of 100% of its adjusted earnings available for shareholder dividends, so I think its very strong growth, including its 17.7% year-over-year increase to an adjusted $20.8 million in fiscal 2015, will allow its streak of annual dividend increases to continue going forward.
3. Keyera Corp.
Keyera Corp. (TSX: KEY) is one of the largest midstream energy companies in Canada. It pays a monthly dividend of $0.125 per share, or $1.50 per share annually, which gives its stock a yield of about 3.8% at today’s levels.
It is also important to make two notes.
First, Keyera has raised its annual dividend payment for five consecutive years, and its recent increases, including its 8.7% hike in August 2015, has it on pace for 2016 to mark the sixth consecutive year with an increase.
Second, I think the company’s increased amount of distributable cash flow, including its 19.8% year-over-year increase to $2.84 per share in fiscal 2015, and its reduced payout ratio, including 49.9% in fiscal 2015 compared with 53.3% in fiscal 2014, could allow it to announce another dividend hike within the next few months.
