If you are concerned about TSX stock market volatility, you may want to consider loading up on stocks that produce passive income. In fact, there are several high-quality stocks that pay dividends or distributions every single month. You can use the dividend income to supplement your lifestyle or to simply re-invest into other areas of the market.
The great part is, even though the market declines, you can still collect a decent return. Many new investors have never experienced a bear market, so it can be comforting to know you are still earning a relatively stable monthly cash return.
If you are looking for some monthly passive income, three stocks I’d consider are Pembina Pipeline (TSX: PPL)(NYSE: PBA), European Residential REIT (TSX: ERE.UN), and Northland Power (TSX: NPI).
Pembina Pipeline: A top TSX infrastructure stock
Pembina Pipeline offers one of the most attractive dividends on the TSX today. This TSX stock yields around 5.57%. Investors receive an attractive $0.21 dividend per share every single month. If you put $10,000 into this stock, you would earn around $46.40 every month.
The great news is that Pembina’s dividend is well covered by highly contracted cash flows from its pipeline, midstream, and gas-processing assets. Its financial profile is set to improve after it announced a partnership with KKR to combine natural gas assets under a new venture. In fact, upon deal completion, Pembina plans to increase its dividend by 3.6%.
All around, Pembina is a well-managed company with integral infrastructure. For a nice dividend and modest growth, this is a great TSX stock to tuck away in your portfolio.
European Residential REIT
European Residential REIT is not a well-known stock in Canada. That is largely because it operates 100% in Europe. It owns multi-family apartment properties across the Netherlands. Despite the REIT climbing 13% over the past month, it still trades with an attractive 3.3% dividend yield. It pays a $0.01321 distribution every single month. If you put $10,000 into European Residential stock, you would earn around $27.50 every month.
This company has been growing its funds from operations per share at an attractive mid-teens rate, without issuing equity and diluting shareholders. This is much faster growth than many European and Canadian apartment peers. Yet the stock still trades at a significant discount to its fair value. As a result, this TSX stock present an attractive opportunity of growth, value, and income from here.
Northland Power: A top TSX renewable stock
Another great passive monthly income stock is Northland Power. It operates a global portfolio of utilities and renewable power projects. Today, this TSX stock yields a near 3% dividend. Every month it pays a $0.10 dividend per share to shareholders. If you put $10,000 into this stock you would earn around $24.25 every month.
Northland is interesting, because it is one of the premium developers of offshore wind projects in the world. It already operates several projects near Germany, but is developing large-scale projects in Poland, Japan, Korea, and Scotland. It also just acquired a large renewable power network in Spain.
Energy security is becoming a major issue across the Western world. Consequently, demand for safe, renewable power is rising and Northland will benefit. It is still one of the cheapest renewable stocks on the TSX today. While this is a great passive-income stock, it also has a large growth opportunity for the decades to come.
