Retirees: These 3 Crash-Resistant Dividend Stocks Pay Cash Every Month

Protect your capital and get solid monthly dividends with stocks like Extendicare (TSX:EXE) and TransAlta Renewables (TSX:RNW).

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Although North American markets bounced back on Monday, investors still need to worry. We’re not out of the woods yet.

There’s just too much uncertainty out there to have much confidence about the markets. The worst could be behind us, or general economic weakness caused by a rapid increase in coronavirus cases could send major indices sharply lower again. Until we can predict the outcome of the virus, I suspect markets will continue to be choppy.

Older investors want nothing to do with such a market, and I can’t say I blame them. These folks have two primary goals — to preserve capital and to invest in stocks that pay succulent dividends. These two qualities allow retirees to ignore all the noise, content in knowing they’ve made proper investment choices.

The time to add these stocks to your portfolio is now. Here are three great recession-proof stocks that pay some of Canada’s best monthly dividends to boot.

Extendicare

Extendicare (TSX: EXE) is primarily in the long-term-care business, a sector that keeps on delivering steady results no matter what the underlying economy does. It is also expanding into the retirement residences sector, and it also has one of Canada’s largest home healthcare businesses.

The company’s shares have suffered from a little weakness lately, but that’s primarily due to lacklustre results, rather than recession fears. The company reported slightly lower net operating income for 2019, thanks to weakness in the home healthcare division. On the plus side, the retirement residences part of the organization experienced solid growth, and long-term care continued to perform as expected.

2020 should see home healthcare profits recover as investments in new technology designed to help the business should start to pay off. And the company plans to open additional retirement residences.

Extendicare pays an excellent dividend, with the payout coming in at $0.04 per share each month. This translates into a well-covered 6.1% yield.

Canadian Apartment Properties

Canadian Apartment Properties REIT (TSX: CAR.UN) is one of Canada’s largest landlords with a portfolio of some 65,000 apartments, townhouses, and manufactured home parks. The company also has significant assets in Europe, including Ireland and the Netherlands.

Apartments are one of the best recession-resistant businesses out there; after all, everyone needs a place to live. And with a stated focus on the Toronto area — some 45% of the portfolio’s income comes from southern Ontario — investors have to like the exposure to that red hot market. Unless you think migration to the region will suddenly evaporate, this is a good part of the country to own real estate. In fact, I predict Toronto will continue to be Canada’s hottest market for years to come.

The stock has performed well during the recent downturn, and investors can count on the the company’s 2.4% yield. In fact, the payout ratio is one of the lowest in the entire REIT universe. Additionally, the company has posted consistent dividend increases over the years as underlying rents continue to march higher.

TransAlta Renewables

Focusing on green energy has suddenly become one of the biggest stories in the investment world, a trend that I’m convinced is a main reason why TransAlta Renewables (TSX: RNW) shares have done so well over the 15 months or so. The stock is up approximately 60% since the lows set in December 2018.

The interesting thing about this company is, it performed really well, despite showing virtually zero growth in 2019. Both EBITDA and adjusted funds from operations came in around the same level as 2018. 2020’s results are expected to be better, with growth projected to be around 5%. The company also has potential to acquire further drop down assets from its parent, TransAlta.

Although the dividend yield is much lower than it was before — a share price that steadily marches higher has a way of suppressing the yield — TransAlta Renewables still has a generous dividend. The current payout is $0.0783 per share on a monthly basis — good enough for a 5.4% yield. Investors could also be treated to a dividend increase this year, which would be the first one since 2017.

Fool contributor Nelson Smith owns shares of EXTENDICARE INC and TRANSALTA RENEWABLES INC.

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