Investing in dividend-paying stocks is probably the easiest and cheapest way to generate recurring passive income every month. While uncertainty and continued spread of the virus have taken a toll on the payouts of several TSX-listed stocks, a few continue to pay their monthly dividends and have resilient businesses, suggesting that their future payouts are safe.
So, if you are looking for an additional earnings stream, consider buying these top TSX stocks with a monthly payout.
NorthWest Healthcare Properties
If you are searching for a stock that will passively pay out regularly, consider buying the shares of NorthWest Healthcare Properties REIT (TSX:NWH.UN). NorthWest Healthcare’s defensive healthcare real estate portfolio (including hospitals, medical office buildings, and clinics) positions it well to boost its shareholders’ returns uninterrupted.
Despite challenges from the COVID-19 pandemic, NorthWest Healthcare’s occupancy stood at 97.4%. Meanwhile, its weighted average lease expiry term improved to 14.6 years. The company’s highly diversified portfolio of 189 income-producing properties, long-term inflation-indexed leases, and strong balance sheet suggests that its payouts are safe.
Also, NorthWest Healthcare’s focus on strategic acquisitions and deleveraging of the balance sheet should accelerate its growth further and support its payouts. NorthWest Healthcare Properties pays a monthly dividend of $0.07 per share, translating into a stellar yield of 6.6%.
Shares of clean energy producer, Northland Power (TSX:NPI), should be on your radar to generate stable monthly passive income. The company’s high-quality, power-producing assets generate predictable cash flows that support its growth and payouts.
Northland Power has consistently paid dividends since listing on the stock exchange in 1997, thanks to its strong revenue streams backed by long-term contractual arrangements and regulated framework. Moreover, its asset base and operating capacity have grown at a double-digit rate annually over the past several years, which is an encouraging sign.
Northland Power’s resilient business, strategic acquisitions, and predictable cash flows could continue to support its future monthly dividend payouts and boost its shareholders’ returns. Northland Power pays a monthly dividend of $0.10, reflecting a decent yield of 2.8%.
Pembina Pipeline (TSX:PPL)(NYSE:PBA) is another top TSX stock offering monthly payouts, thanks to its low-risk and diversified energy infrastructure assets. Since inception, Pembina Pipeline has paid $9.1 billion in dividends. Moreover, its strong fee-based cash flows suggest that its future dividend payouts are pretty safe.
Pembina Pipeline’s underlying business benefits from the long-term, fee-based contracts. Moreover, these contracts have cost-of-service arrangements or take-or-pay agreements that lower volume or price risk. The company expects fee-based income to account for 90-95% of its adjusted EBITDA in 2020. Pembina also projects that its cash flows derived from fee-based contracts will be more than enough to fund its dividends and meet its operating obligations.
Pembina Pipeline pays a monthly dividend of $021 per share, reflecting a yield of 8.2%. While Pembina’s high dividend yield attracts, its stock is down about 32% year to date and presents a good entry point.
Similar to all investments, there is a risk associated with investing in stocks. However, all these companies have a strong business with resilient cash flows that support their monthly payouts. Investors could rely on these monthly dividend-paying stocks for a regular passive income.
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Fool contributor Sneha Nahata has no position in any of the stocks mentioned. The Motley Fool recommends NORTHWEST HEALTHCARE PPTYS REIT UNITS and PEMBINA PIPELINE CORPORATION.