3 Great Monthly Dividend Stocks for Beginner Investors

Want to earn monthly income? If so, H&R Real Estate Investment Trust (TSX:HR.UN), Shaw Communications Inc. (TSX:SJR.B)(NYSE:SJR), and CI Financial Corp. (TSX:CIX) can make that happen.

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If you’re new to investing and are interested in buying a monthly dividend stock 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 of 4-7%, so let’s take a quick look at each to determine if you should buy one or all of them today.

1. H&R Real Estate Investment Trust

H&R Real Estate Investment Trust (TSX:HR.UN) is one of North America’s largest diversified REITs with ownership interests in over 500 office, retail, industrial, and residential properties across Canada and the United States. It pays a monthly distribution of $0.1125 per share, or $1.35 per share annually, which gives its stock a yield of about 6.2% at today’s levels.

It is also very important for investors to make two notes.

First, the company has maintained its current annual distribution rate since fiscal 2013.

Second, I think H&R’s consistent growth of funds from operations, including its 3.7% year-over-year increase to $1.95 per share in fiscal 2015, and its low payout ratio, including 69.2% of its funds from operations in fiscal 2015, will allow it to raise its dividend when it reports its first-quarter earnings results in May.

2. Shaw Communications Inc.

Shaw Communications Inc. (TSX:SJR.B)(NYSE:SJR) is one of Canada’s leading pure-play connectivity providers, and it is the country’s fourth-largest wireless carrier. It pays a monthly dividend of $0.09875, or $1.185 per share annually, which gives its stock a yield of about 5.1% at today’s levels.

It is also very important for investors to make two notes.

First, the company’s 7.7% dividend hike in March 2015 has it on pace for fiscal 2016 to mark the 13th consecutive year in which it has raised its annual dividend payment.

Second, I think Shaw’s streak of annual dividend increases can continue going forward for the following three reasons:

  • It generates ample free cash flow, including $291 million in its first half of fiscal 2016
  • It has a modest dividend-payout ratio, including 64.9% of its free cash flow in its first half of fiscal 2016
  • Its two “transformative transactions” that closed in the last two months, including its $2.65 billion sale of Shaw Media and its $1.6 billion acquisition of WIND Mobile, sets the company up for long-term growth

3. CI Financial Corp.

CI Financial Corp. (TSX:CIX) is one of Canada’s largest wealth management firms and investment fund companies with nearly $143 billion in assets under management and advisement. It pays a monthly dividend of $0.11 per share, or $1.32 per share annually, which gives its stock a yield of about 4.8% at today’s levels.

It is also very important for investors to make two notes.

First, the company’s 4.8% dividend hike in June 2015 has it on pace for fiscal 2016 to mark the seventh consecutive year in which it has raised its annual dividend payment.

Second, I think CI Financial’s consistent growth of free cash flow, including its 7% year-over-year increase to $596.6 million in fiscal 2015, and its modest payout ratio, including 60.7% of its free cash flow in fiscal 2015, will allow it to raise its dividend when it reports its first-quarter earnings results on May 5.

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.

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