In times of stock market volatility, holding Canadian stocks that pay monthly passive income can be comforting. Somehow, it is nice to know you are receiving a tangible cash return every single month.
Other forms of passive income, like owning a rental property or a small business, are hardly passive. People often fail to calculate the amount of time, energy, and expenses related to managing these types of passive-income assets.
A well-built portfolio of stocks can provide true “passive income”
That is why I prefer to own stocks that already have great businesses and strong management teams. All I need to do is complete some upfront research, understand the business, and then pay the capital to own a stake in the business.
Other than some quarterly or annual follow up, the monthly passive income from dividends is truly that — passive. If you are a do-it-yourself (DIY) investor, here are three great Canadian stocks you might want to consider for a monthly passive-income stream.
Dream Industrial REIT: A top Canadian real estate stock
If you don’t want the effort of being a landlord, why not just buy Dream Industrial REIT (TSX: DIR.UN)? It operates a large portfolio of warehousing, logistics, and industrial assets in Canada, the United States, and Europe.
This Canadian stock pays a $0.05833 per unit distribution every month. Annualized, that equals a 4.24% dividend yield today. If you put $10,000 into this stock, you would earn about $35 every single month.
Industrial real estate is an incredibly attractive asset class. Since the pandemic, demand for industrial space has been insatiable. That has sent rents and asset values soaring. As a result, Dream has been enjoying +10% annual cash flow-per-share growth. I don’t see that slowing and that could translate into eventual distribution increases as well.
Northland Power: A top renewable power stock
Owning high-quality infrastructure is nearly impossible to buy as an individual investor. However, if you buy Northland Power (TSX: NPI), you get to own a piece of a high-quality portfolio of utility and renewable power assets. The company operates a diversified portfolio of assets across North America, Europe, and Asia.
Its core expertise is offshore wind. That is one of the fastest-growing renewable power segments. It has a large backlog of projects that are expected to multiply EBITDA and cash flows over the next five years.
Today, this Canadian stock pays a $0.10-per-share dividend every month. That translates to a 2.89% dividend yield. If you put $10,000 into this stock, you would earn over $24 every single month.
Pembina Pipeline: A top Canadian energy infrastructure stock
The Canadian energy patch is prospering because of elevated oil prices in 2022. This trend isn’t expected to abate anytime soon. This will be very favourable for Pembina Pipeline (TSX: PPL)(NYSE: PBA). It is one of Canada’s leaders in natural gas processing, midstream, and energy transportation.
While this Canadian stock is up 23% in 2022, it still pays an attractive 5.4% dividend yield today. It pays a monthly dividend worth $0.21 per share. Put $10,000 into this stock, and you could earn $45 a month in passive income.
Pembina just created a new joint venture with KKR. This deal is expected to be very accretive and create scale and synergies. Upon completion Pembina will buy back stock and increase its dividend by 3.6%. If you are looking for a reliable Canadian stock with an elevated yield, Pembina is the one to own.
