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Want Passive Income? These 3 TSX Stocks Pay Monthly

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Looking for passive income?

If you are, then monthly pay dividend stocks are among the best options out there.

If you have a bit of money saved, you can get a recurring monthly income stream going just by investing in dividend stocks.

The majority of dividend stocks pay by the quarter, but you can find plenty that have a monthly payment schedule. This doesn’t affect the ultimate return or make the yield any higher, but it does provide cash on a more regular basis. If you have a few hundred thousands of dollars to invest, you can get a truly passive-income stream going by investing in monthly pay dividend stocks. In this article, I’ll explore three monthly pay TSX dividend stocks with high yields and good prospects.


AltaGas (TSX:ALA) is a Canadian energy stock involved in natural gas pipelines and utilities. Its business activities include the following:

  • NGL extraction
  • NGL storage
  • Transportation
  • Exporting propane
  • Delivering natural gas utility services to customers mainly in the United States

AltaGas pays a $0.83 monthly dividend, which works out to $0.99 on an annualized basis. At today’s stock price of $26.31, that gives a 3.8% yield. It’s not an enormous yield but higher than average, and the cash is paid out on a monthly schedule.

Northwest Healthcare Properties REIT

Northwest Healthcare Properties REIT (TSX:NWH.UN) is a Canadian healthcare REIT that leases healthcare office space to health clinics and hospitals. It has a 6.1% yield at today’s prices, and the dividend is paid out monthly.

Northwest Healthcare performed pretty well in 2020, despite the COVID-19 pandemic affecting its results at the time. Some highlight metrics for the 2020 fiscal year included the following:

  • Total unitholder return: 13.5%
  • Revenue: $374 million, up 2%
  • Fee income: $40.4 million
  • AFFO per unit: $0.85 — up 1%
  • Portfolio occupancy: 97% overall; 98.1% on the European portfolio

Overall, those are pretty solid results for a year when COVID-19 was ravaging the economy. And this REIT should do better in 2021, with the economy reopening.

TransAlta Renewables

TransAlta Renewables (TSX:RNW) is a renewable energy company that generates electricity from wind, hydro, solar, and gas. It operates in both Canada and Australia. The stock pays out $0.078 per month, which provides a 4.4% yield at today’s prices. In the most recent quarter, the company produced $126 million in revenue (up 14.5%), $52 million in net income (up 1,633%), and $123 million in adjusted EBITDA (up 4.6%). Overall, it was a pretty solid quarter, and RNW’s dividend looks safe.

Foolish takeaway

If you’re looking for monthly passive income, dividend stocks are the way to go. Few sources of income are truly as passive as investments, and stocks are among the best investments out there. Of course, you need a substantial amount of money invested to pull really life-changing money out of dividend stocks. But if you build up your positions over a lifetime, it can be done. And best of all, you don’t need to spend months working on marketing and sales beforehand to get started — as is the case with most other “passive”-income sources.

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 Andrew Button has no position in any of the stocks mentioned. The Motley Fool recommends ALTAGAS LTD. and NORTHWEST HEALTHCARE PPTYS REIT UNITS.

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