If you are looking for a monthly income flow through stocks, I have three TSX-listed dividend stocks that offer monthly payouts. These companies generate resilient cash flows, suggesting that their dividends are safe. Moreover, these companies offer high yields, making them attractive investments to generate passive income amid a low-interest-rate environment.
Also, you need only $50 to buy these top Canadian dividend stocks.
Pembina Pipeline
With its long history of dividend payments and a high yield of 7.4%, Pembina Pipeline (TSX: PPL)(NYSE: PBA) is a must-have stock in your monthly income portfolio. Despite the challenges from the pandemic, Pembina Pipeline had consistently paid its dividends in 2020. Its highly contracted business generates resilient fee-based cash flows and supports its dividend payments.
I believe the vaccine distribution and economic reopening are likely to accelerate the pace of recovery in demand for commodities Pembina Pipeline transports. Meanwhile, the company is expected to benefit from $1 billion in new assets and cost-reduction measures.
Pembina has maintained and raised its annual dividends since 1998, thanks to the continued growth in its bottom line. Meanwhile, Pembina’s dividend has grown at a compound annual growth rate (CAGR) of 6.5% in the past five years.
Also, Pembina stock looks attractive on the valuation front. It trades at a next 12-month EV-to-EBITDA multiple of 9.2, which is well below Enbridge’s and TC Energy’s forward multiples of 11.4 and 11.2, respectively.
Pembina’s low valuation, resilient cash flows, and high yield make it a top investment at the current price levels.
TransAlta Renewables
Renewable power producers, TransAlta Renewables (TSX: RNW), is another top bet to generate steady monthly income flow. The company’s diversified asset base and highly contracted portfolio generate predictable and growing cash flows and drive its dividends.
Since listing on the TSX, TransAlta Renewables has raised its dividends at a CAGR of 4%. Meanwhile, its cash available for distribution has increased significantly. Investors should note that the company’s 100% of power generation is contracted. Moreover, these contracts have a weighted average contract life of 12 years.
Thanks to its resilient business and growing distributable cash flows, TransAlta Renewables could continue to increase its annual dividends at a decent pace. Currently, the company offers a healthy yield of 4.2%.
NorthWest Healthcare Properties
NorthWest Healthcare (TSX:NWH.UN) defensive healthcare real estate portfolio generates strong cash flows irrespective of economic situations. Like Pembina and TransAlta Renewables, NorthWest Healthcare pays monthly dividends and yields over 6% at the current price levels.
NorthWest Healthcare’s occupancy and rent-collection rate remain high, as more than 80% of its tenants are backed by government funding. Moreover, about 73% of its rents are inflation-indexed, and its contracts have a weighted average lease expiry term of about 15 years.
Besides its strong operating metrics, NorthWest Healthcare benefits from accretive acquisitions and geographical expansions. Northwest’s resilient business and strong balance sheet positions it well to boost investors’ returns through consistent dividend payments.
Bottom line
Investors should note that all these companies have strong businesses that generate resilient cash flows and supports monthly dividend payouts. Investors looking to supplement their monthly income could consider adding these stocks to your portfolio right now. I would suggest using your Tax-Free Savings Account, which has a contribution limit of $6,000 in 2021, to generate tax-free dividend income.
