Stocks that send monthly dividend cheques have a great appeal for retirees. A simple reason that makes these stocks attractive is that it’s much easier to sync monthly expenses with a monthly income stream. Here are two monthly income stocks that are backed by solid and growing businesses.
Shaw Communications Inc.
Shaw Communications Inc. (TSX: SJR.B)(NYSE: SJR) is one of the smallest telecom operators from Canada that’s in a strong growth mode. The Calgary-based company is fast gaining the market share in the nation’s wireless market after it acquired Freedom Mobile in 2016. Its management is targeting to capture at least a quarter of the Canadian wireless market through its expansion, business restructuring, and network improvement efforts.
The latest quarterly numbers show that the company is succeeding in this drive. During the third quarter, Shaw added 54,200 net wireless postpaid subscribers. The number was more than twice the company’s additions in the same period a year ago as well as far above the analyst consensus predictions of 45,000.
Average revenue per unit (the average monthly bill customers pay) also beat expectations, increasing by 7.5% to $39.84.
Despite the recent strength in its wireless business, investors remain skeptical about the future, as the company’s investment in Corus Entertainment Inc. (TSX: CJR.B) suffered a major blow. But I see this weakness a good buying opportunity for retirees to lock in its attractive dividend yield. Trading at $26.42 with an annual dividend yield of 4.49%, Shaw pays $0.10 a share monthly dividend.
RioCan REIT
Canada’s real estate sector remains one of the best avenues for retirees to earn monthly income.
REITs manage properties that generate monthly cash flows. REITs have been structured to distribute the maximum cash to shareholders. The biggest advantage of investing in REITs is the tax treatment these companies get from the CRA. REITs pay distributions before they pay tax to the taxman, and that means more money in your pocket.
In Canada, we have many quality REITs that have solid portfolios of rental properties that churn out cash on monthly basis. In this space, RioCan Real Estate Investment Trust (TSX: REI.UN) offers good long-term potential.
This REIT has an impressive history of rewarding investors with growing dividends. The company has been paying dividends for the past 23 years. During that period, RioCan raised its annual distribution 17 times.
To cope with the changing retail landscape amid growing e-commerce, RioCan is restructuring its business, focusing on residential developments. Under the RioCan Living brand, the company plans to turn selected existing retail shopping centres into vibrant, mixed-use communities.
RioCan shares have been on a gradual recovery for the past one year. Its 5.8% dividend yield and a $0.12-a-share monthly dividend make this stock attractive for income investors.
