The Best Dividend Stock in Canada for Monthly Income

With the markets going up in smoke, I would pick up the best dividend stock on the TSX today and never let go, bringing in monthly income for life!

Amy Legate-Wolfe

Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Before joining Motley Fool Canada, she wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote: “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published January 24, 2022 3:30 pm EST

| More on: VITL.UN

When it comes to finding the best dividend stock in Canada, there are a few points to consider. And it goes far beyond the dividend yield. Sure, you can find a high yield, but that’s something the company can cut at any time.

Instead, what a Motley Fool investor should look for is stability and security: funds and payouts that are secure in industries that aren’t going anywhere.

That’s why today, I’d say the best dividend stock out there has to be NorthWest Healthcare Property Units REIT (TSX:NWH.UN).

money cash dividends — Image source: Getty Images

Checks all the boxes

NorthWest is the best dividend stock that you can find because of the industry it’s in. During the pandemic, some of the best real estate investment trusts (REIT) saw shares tumble. This came from not knowing the future of office spaces, rental units, and brick-and-mortar locations.

But for NorthWest, it was a different story. The combination of low interest rates and being in the healthcare sector allowed the company to see an uptick in lease agreements. As of its latest earnings report, it now boasts an average 14.1-year lease agreement.

Furthermore, as mentioned, it’s in the essential services industry. So, even during the pandemic, it was able keep all its doors open from hospitals to office spaces and everything in between.

Growing and growing

All that revenue has meant the best dividend stock could afford to expand, and expand it has. NorthWest purchased properties in the Netherlands as well as an Australian healthcare REIT. It now has a net asset value that’s grown 11% year over year, as of its latest earnings report.

The company continues to find strategic advances to improve its bottom line. It has strong fundamentals, long-term secured growth, and even more progress in the United Kingdom will provide more income for 2022 — all while trading at 6.36 times earnings, with an analyst target of $14.77 as of writing for a potential upside of 14%.

That sweet, sweet dividend

So, now you have secured growth, stable revenue, and a solid industry. That leads to the well-supported dividend of 6.06% as of writing, or $0.80 per share per year. Yes, it’s not the highest, but if you’re willing to make a solid investment, you can bring in stellar dividends from this one stock alone.

That’s what makes this the best dividend stock right now. It’s cheap and yet with it you can bring in so much monthly income. If you were to invest $60,000 today, that would bring in $3,709 of annual income, or $309 per month! Meanwhile, you could turn that into $68,485 to reach that analyst target price. Add in your dividends, and by the end of the year, you could have a portfolio of $72,194 for returns of $12,194 in a year!