TSX Stocks: Mighty Monthly Dividends to Survive the Harsh Times

Canadian investors can cover their monthly expenses with the help of stable and safe dividends offered by these three TSX stocks.

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It’s indeed delightful to receive a passive income from stock investments. Wouldn’t it be even more pleasing if all our monthly expenses are taken care of by the investment portfolio? Let’s take a look at TSX stocks that offer attractive dividend profiles and pay dividends monthly.

Extendicare

Extendicare (TSX:EXE) is a Markham-based healthcare company that offers senior care across the country. It operates through 118 owned and managed homes and serves a growing senior population in Canada.

Extendicare stock offers a dividend yield of 8%, much higher than the TSX stocks at large. In 2020, the company plans to pay a dividend of $0.48 per share. Thus, if an investor puts $50,000 in EXE stock, he will receive approximately $330 per month in dividends.

Extendicare’s non-cyclical nature of business could act as a hedge against a potential market crash. It is a slow-growing industry and one can expect it to generate a stable cash flow stream for the future. However, the growth potential looks promising given the increasing population of seniors in the country.

Extendicare stock has fallen almost 30% in the last 12 months. Despite its rally since last month, the stock still trades 60% lower to its 52-week high levels.

Northland Power

Northland Power (TSX:NPI) is a $6 billion renewables power company. The stock offers a dividend yield of 4.1% which makes up $0.1 per share dividend a month.

Northland Power has been paying consistent dividends since going public in 1997. Its long dividend payment history indicates reliability and stability. It has a diversified renewables generation portfolio and operates 2.6 gigawatts of power assets across the globe.

The stock has surged almost 50% after an immense weakness during the COVID-19 crash. However, despite such a steep surge, Northland Power stock seems fairly valued.

Northland Power’s cash flows will mostly remain constant even in case of an economic downturn, given its long-term contracts. This will ultimately facilitate steady dividends for the future. In the last five years, its dividends increased by more than 2% compounded annually.

Pizza Pizza

Pizza Pizza Royalty (TSX:PZA) is a $209-million company and operates through owned and franchise-oriented restaurants.

It is currently trading at a forward dividend yield of 7.2%. The company is expected to pay a dividend of $0.60 per share in the current year. The company cut its monthly dividend by 30% starting in April in order to strengthen the balance sheet.

The hospitality industry is one of the worst-hit sectors amid this pandemic-driven lockdown. Pizza Pizza has also seen a negative impact on its walk-in sales during the lockdowns.

However, it is relatively well placed compared to peer eat-in restaurants at the moment. Even if lockdowns are released in the near future, it might take time for people to come out and business activities normalize.

Pizza Pizza stock, not a constituent of the TSX Index, has been noticeably weak during the COVID-19 pandemic. However, it has bounced back sharply in the last few weeks. Notably, it is still trading 25% lower than its 52-week high earlier this year.

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 Vineet Kulkarni has no position in any of the stocks mentioned. The Motley Fool owns shares of PIZZA PIZZA ROYALTY CORP.

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