Monthly Income: 2 Dividend Stocks Yielding up to 8%

If you’ve some spare savings, and you want to earn some additional monthly income, then investing in stable dividend stocks is one way to achieve this goal.

There are not many companies that pay monthly dividend. In Canada, real estate investment trusts (REITs) pay monthly dividend for investors who are looking to match their income with their monthly expenses.

Let’s find out if Corus Entertainment Inc. (TSX: CJR.B) and RioCan Real Estate Investment Trust (TSX: REI.UN) should be part of your monthly income portfolio.

Corus Entertainment

As you look for high-yielding stocks to boost your monthly income, you should always be careful before taking a position.

Corus currently pays an attractive monthly distribution that yields over 8.3% annually. The biggest question you should answer when you see this type of yield is whether or not the company is going to sustain this payout. You don’t want to catch a falling knife.

For Corus, I think, the jury is still out.

After going through a tough couple of years, Corus stock is gaining some lost ground. Its shares have gained about 10% over the past year after falling 60% from late 2014 to under $10.

Corus stock now trades at $13.71 as the company recovers from a rule change from the Canadian regulator that gave cable subscribers more flexibility on what they want to choose from cable providers.

To give its customers more choices, Corus bought Shaw Media from Shaw Communications to get access to more content to compete in a new business environment

The most recent quarterly results show that Corus is on the right track.

For the third quarter, it beat analysts’ revenue expectations amid a return to growth, as it integrated the operations of Shaw Media.

Revenues grew 28% and 3% on a pro-forma basis, and profits rose 35% and 14% on a pro-forma basis when compared to the same period a year ago. Currently, Corus pays out $0.095 every month, or $1.14 annually per share. 

RioCan Real Estate Investment Trust

RioCan is Canada’s largest REIT which focuses on retail properties with some of the largest retail brands as its clients. As of June 30, it had ownership interests in 299 retail and mixed-use properties, including 15 development properties, which total about 45.35 million square feet.

Unlike Corus, RioCan has a stable monthly dividend stream. With a yearly dividend yield of 5.93%, it pays a monthly distribution of $0.1175 per unit, or $1.41 per unit annually.

RioCan has a solid distribution history going back to 1994. Since then, it has raised its annual distribution 16 times.

Despite this impressive track record, RioCan shares are currently down about 11% this year. This pullback is in line with investors’ general concerns about the rising interest rates and the cooling of the Canadian housing market.

Which one to pick?

I think both stocks present an interesting risk/reward proposition to investors looking to earn stable monthly income.

If your risk appetite is limited, then RioCan offers a better opportunity, especially because it’s trading close to the 52-week low.

Corus is a riskier bet, but there’s a good chance that you might be compensated well for taking this risk as the company consolidates its business after a couple of tough years.