3 Great Monthly Dividend Stocks for Retirees

Do you need or want monthly income? If so, consider investing in Boardwalk REIT (TSX:BEI.UN), Altagas Ltd. (TSX:ALA), and Morneau Shepell Inc. (TSX:MSI).

| More on:
The Motley Fool

As history has shown, owning a portfolio of dividend-paying stocks is the best way to build wealth over the long term. However, if you do not reinvest your dividends and receive your cheques in the mail to live off of, as many retirees do, there is one major problem: our bills arrive monthly, but our cheques arrive quarterly.

Fortunately, there are stocks that pay dividends on a monthly basis, which makes everything much easier.

With this in mind, let’s take a quick look at three monthly dividend stocks with high and safe yields of 4-7% that you could buy today.

1. Boardwalk REIT

Boardwalk REIT (TSX:BEI.UN) is one of Canada’s largest residential landlords with over 200 communities across four provinces. It pays a monthly distribution of $0.1875 per share, or $2.25 per share annually, which gives its stock a yield of approximately 4.15% at today’s levels.

Investors must also make three notes.

First, the company’s 10.3% dividend hike in February has it on pace for fiscal 2016 to mark the fifth consecutive year in which it has raised its annual dividend payment.

Second, I think Boardwalk’s consistent growth of funds from operations, including its 5.9% year-over-year increase to an adjusted $3.23 per share in fiscal 2015, its modest payout ratio, including 63.1% in fiscal 2015 compared with 66.7% in fiscal 2014, its high occupancy rate, and its planned portfolio growth in fiscal 2016 will allow its streak of annual distribution increases to continue going forward.

Third, the company has paid out special distributions in each of the last two years, including a $1.40 special distribution in December 2014 and a $1.00 special distribution in December 2015, and I think its ample funds from operations will allow it to pay out another special distribution in 2016.

2. Altagas Ltd.

Altagas Ltd. (TSX:ALA) is a diversified energy infrastructure company, and its assets include natural gas pipelines, natural gas storage facilities, and clean power-generation facilities. It pays a monthly dividend of $0.165 per share, or $1.98 per share annually, which gives its stock a yield of approximately 6.2% at today’s levels.

Investors must also make two notes.

First, the company’s 3.1% dividend hike in October 2015 has it on pace for fiscal 2016 to mark the sixth consecutive year in which it has raised its annual dividend payment.

Second, Altagas expects its normalized funds from operations to grow by approximately 15% in 2016, so I think this growth paired with its modest payout ratio, including 55.4% in fiscal 2015, will allow its streak of annual dividend increases to continue until 2017 at least.

3. Morneau Shepell Inc.

Morneau Shepell Inc. (TSX:MSI) is one of Canada’s largest providers of human resource services and related technologies. It pays a monthly dividend of $0.065 per share, or $0.78 per share annually, which gives its stock a yield of approximately 4.4% at today’s levels.

Investors must also make two notes.

First, the company has maintained its current annual dividend rate since 2011.

Second, I think Morneau Shepell’s increased amount of normalized free cash flow, including its 21.9% year-over-year increase to $61.6 million in fiscal 2015, and its low payout ratio, including 60.8% in fiscal 2015 compared with 74.1% in fiscal 2014, will allow it to raise its dividend when it reports its first-quarter earnings results on May 9.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Joseph Solitro has no position in any stocks mentioned. Altagas is a recommendation of Stock Advisor Canada.

More on Dividend Stocks

concept of real estate evaluation
Dividend Stocks

Why the Market Should Stop Hating on This Reliable REIT

You can get a lot of dividend income with an investment in Northwest Healthcare Properties REIT (TSX:NWH.UN).

Read more »

TFSA (Tax-Free Savings Account) on wooden blocks and Canadian one hundred dollar bills.
Dividend Stocks

Max Your TFSA Impact: 4 Dividend Stocks to Buy and Hold Forever

Adding these TSX dividend stocks to your TFSA can maximize your portfolio's income potential and compound your returns over time.

Read more »

man touches brain to show a good idea
Dividend Stocks

This 6% Yield Has Survived Every Market Crash Since 1995

This top TSX stock boasts a yield of over 6% and a dividend track record that has weathered every market…

Read more »

Income and growth financial chart
Dividend Stocks

This Canadian Retail Stock Yields 3.8% and Keeps Expanding

A growing dividend, rising share price, and big strategic moves make this top Canadian retail stock worth owning for the…

Read more »

Forklift in a warehouse
Dividend Stocks

It’s Possible! Build a $250,000 TFSA Using Just 2 Dividend Stocks

Want a $250,000 TFSA that pays out monthly? These two solid REITs pay monthly distributions.

Read more »

Two senior friends playing beat tennis on sand tennis court
Dividend Stocks

2 Canadian Stocks to Buy and Hold for a Lifetime

These Canadian stocks have the strength to reward patient investors for decades – no matter what the market brings.

Read more »

resting in a hammock with eyes closed
Dividend Stocks

1 Canadian Utility Stock That’s My Ultimate Sleep-Well-At-Night Pick

Its defensive business and predictable earnings position it to deliver steady, long-term returns, helping you sleep well at night.

Read more »

A worker uses a laptop inside a restaurant.
Dividend Stocks

Dream of Owning a Restaurant? These 2 Food Stocks Are a Far Savvier Investment

Kitchen nightmares exist for a reason. These TSX restaurant royalties are better picks.

Read more »