The Motley Fool

3 Monthly Income Stocks With Juicy Dividends

Various Canadian dollars in gray pants pocket
Image source: Getty Images

For some investors, finding the right mix of income-producing stocks can be a daunting task. Not only do investors need to select the right investments, but they also need to factor in often widely-differing dividend payout schedules. This is where the lesser-known yet lucrative array of monthly dividend stocks comes into play.

I won’t dwell into the quarterly vs monthly distribution argument apart from noting that a monthly distribution does make it easier to budget and ensure a consistent flow of income. It’s an intriguing option for investors to consider.

Here are three monthly dividend options to consider.

The sky’s the limit

Exchange Income Corp (TSX:EIF) is a stock that is often overlooked in lieu of other more popular picks. Unfortunately, this means that investors are missing out on a handsome 5.20% yield.

Apart from that appetizing yield, Exchange offers a well-diversified business consisting of over one dozen subsidiary companies that fall under two broad categories- aviation and manufacturing.

Prime examples of those businesses include regional cargo and passenger airlines between rural areas of Ontario and Manitoba from the aviation segment, and cell phone construction and installation services from the manufacturing segment.

Those subsidiary businesses continue to generate strong cash flow with each passing quarter and operate in unique niche segments of the market where competition is low and demand is stable. In short, Inter Pipeline is a solid option for any portfolio with immense long-term growth prospects.

Go with the flow

Inter Pipeline (TSX:IPL) is another interesting yet often overlooked pick. Inter Pipeline is an energy infrastructure company that has both a pipeline and storage business, as well as operating a lucrative NGL business that is among the largest in Canada.

Apart from the stable and recurring revenue that comes from the pipeline and storage business, Inter Pipeline’s upcoming Heartland Petrochemical Complex is what investors should be really excited about.

Once the facility is completed next year, it will covert locally sourced inexpensive propane into a type of plastic used in a variety of manufacturing processes. Inter Pipeline expects the Heartland complex to add upwards of $400 million in annual EBITDA to the company’s bottom line.

In terms of a dividend, Inter Pipeline offers an appetizing 7.70% yield.

Save the planet and get rich

Renewable energy companies represent some of the most in-demand investments at the moment, and Calgary-based TransAlta Renewables (TSX:RNW) should be on the radar of nearly every investor.

TransAlta boasts a portfolio of over 40 facilities such as solar, wind, hydro and gas elements scattered across 10 operating regions.

In terms of growth, earlier this month, TransAlta announced two new wind farm projects that came online in the U.S., highlighting the immense long-term potential to be found in renewable energy projects.

In terms of a dividend, the monthly payout is not only well covered through a steady stream of revenue, but also earns a mouth-watering 5.96% yield.

A net income of $224 million over the trailing 12-month period highlights that potential, as does the fact that TransAlta, which finished 2019 with gains well into double-digit territory, continues to seek out new opportunities for growth.

Final thoughts

The three stocks noted above not only come from different segments of the market, but are all defensively placed for long-term gains. Adding one or all of these stocks to your portfolio will not only earn a handsome income stream, but will also provide an avenue for long-term growth.

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 Demetris Afxentiou has no position in any stocks mentioned.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss an important event.

Iain Butler and the Stock Advisor Canada team only publish their new “buy alerts” twice a month, and only to an exclusively small group.

This is your chance to get in early on what could prove to be very special investment advice.

Enter your email address below to get started now, and join the other thousands of Canadians who have already signed up for their chance to get the market-beating advice from Stock Advisor Canada.