The Motley Fool

3 Safe Monthly-Paying Dividend Stocks to Buy Right Now

Image source: Getty Images

Despite the encouraging news on the vaccine’s effectiveness, the distribution of the vaccine could be challenging. Industry experts project the widespread distribution of the vaccine could not happen before mid-2021.

Meanwhile, COVID-19 cases are rising worldwide, which could prompt governments to reimpose restrictions, thus slowing down the recovery rate. Further, the widening gap between the economy and the equity markets could lead to a correction. Amid the uncertain outlook, investors could supplement themselves with passive income by investing in safe monthly-paying dividend stocks.

NorthWest Healthcare Properties REIT

First on my list is NorthWest Healthcare Properties REIT (TSX:NWH.UN), which invests in healthcare real estate. Despite the pandemic-induced disruptions, its occupancy and rent-collection rate has been on the higher side. Further, the company’s 80% of the revenue is supported by public healthcare funding, thus insulating its financials from the economic downturns. Its weighted average lease expiry stands at 14.5 years as of September 30.

Meanwhile, NorthWest Healthcare is looking at expanding its operations in Europe. This year, it has acquired $719 million of assets in Europe, including two hospitals in the U.K. for $620 million. These acquisitions could drive the company’s earnings growth in the coming quarters.

Given its defensive real estate portfolio, NorthWest Healthcare’s cash flows are stable, thus supporting its dividends. Currently, the company pays monthly dividends of $0.067 per share at an annualized rate of $0.80 and a dividends yield of 6.3%.

Pizza Pizza Royalty

My second pick would be Pizza Pizza Royalty (TSX:PZA), which runs a highly franchised business under Pizza Pizza and Pizza 73 brands. Its revenues and cash flows are safe compared to the less-franchised companies, as the royalty is based on sales and not on profits.

Further, the company has recently invested in building its delivery, pick-up, and digital ordering infrastructure amid the pandemic-infused restrictions, which has helped the company offset the impact of declining footfalls. The reopening of the economy has also boosted its financials. Pizza Pizza Royalty’s top line and bottom line grew by 9.3% and 9.4% on a sequential basis in the September-ending quarter, respectively.

Last month, the company’s board had raised its monthly dividends by 10% to $0.055 per share at an annualized rate of $0.66 per share. Its dividend yield looks attractive at 7.1%. With its stock trading at 5% lower for this year, I believe Pizza Pizza Royalty would be a good buy for income-seeking investors.

Shaw Communications

In this digital era, telecommunication services have become essential for our daily activities and businesses to thrive. So, I have picked Shaw Communications (TSX:SJR.B)(NYSE:SJR), the fourth-largest telecommunication player in Canada with a market capitalization of $12 billion, as my third pick. Its resilient wireline business and growing wireless segment have been generating robust cash flows to support its monthly dividend payouts.

In the August-ending quarter, Shaw Communication added 60,000 net wireless connections. The introduction of Shaw Mobile resonated well with the customers. Shaw Mobile delivers its customers a WiFi experience even on the go by automatically connecting to the thousands of hotspots across Western Canada. The company’s adjusted EBITDA also rose 11.2% year over year, while its free cash flows rose by 260%. For fiscal 2021, the company’s management expects to generate free cash flows of $800 million. So, I believe the company’s dividends are safe.

Since 2009, the company has paid dividends consistently. Currently, it pays monthly dividends of $0.099 per share at an annualized payout rate of $1.18 per share and a dividend yield of 5.2%.

Meanwhile, check out the following report for the top 10 stocks to buy this month.

The 10 Best Stocks to Buy This Month

Renowned Canadian investor Iain Butler just named 10 stocks for Canadians to buy TODAY. So if you’re tired of reading about other people getting rich in the stock market, this might be a good day for you.

Because Motley Fool Canada is offering a full 65% off the list price of their top stock-picking service, plus a complete membership fee back guarantee on what you pay for the service. Simply click here to discover how you can take advantage of this.

Click Here to Learn More Today!

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.

The Motley Fool owns shares of PIZZA PIZZA ROYALTY CORP. The Motley Fool recommends NORTHWEST HEALTHCARE PPTYS REIT UNITS. Fool contributor Rajiv Nanjapla has no position in the companies 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.