Passive Income: 3 Top TSX Stocks That Pay Dividends Monthly

Are you interested in buying stocks that can pay you monthly? Here are three top picks!

Payday ringed on a calendar

Image source: Getty Images

Dividend stocks can be very attractive because of the source of passive income that they provide. However, many dividend stocks tend to make distributions once every quarter. That means investors will be paid out every three months. For investors that are hoping to live off their dividends, a monthly payout may be more appealing. This gives investors more flexibility and reassurance knowing that the next dividend payment isn’t that far away.

In this article, I’ll discuss three TSX stocks that pay dividends monthly!

An outstanding dividend stock

Pembina Pipeline (TSX:PPL)(NYSE:PBA) may not be a stock that many investors are familiar with, but it’s been an excellent one to hold for the past decade. This company provides pipelines, facilities, and marketing services within the energy industry. A large proportion of its revenue is supported by fee-based and high take-or-pay contracts.

Listed as a Canadian Dividend Aristocrat, Pempina Pipeline has managed to increase its dividend in each of the past nine years. With a forward dividend yield of 5.25%, this stock should be very attractive to dividend investors. In addition, its standard dividend-payout ratio was reported to be 53% in 2021, which suggests that Pembina Pipeline has room to continue raising its distribution in the future.

A popular telecom provider

Shaw Communications (TSX:SJR.B)(NYSE:SJR) is one of the largest telecom providers in Canada. Its mobile division operates under two banners: Shaw Mobile (British Columbia and Alberta) and Freedom Mobile (British Columbia, Alberta, and Ontario). Shaw also provides residential communication services to customers in British Columbia, Alberta, Saskatchewan, Manitoba, and northern Ontario via its Fibre+ wireline network.

Although Shaw isn’t listed as a Canadian Dividend Aristocrat, I believe this stock is still worth consideration. Since 2009, the company has done an excellent job increasing dividends over time. Over the past 13 years, its dividend has grown at a compound annual growth rate (CAGR) of about 3%, which beats the long-term inflation rate. In addition, over that 13-year period, Shaw’s dividend has never experienced a decline. For those reasons, I believe Shaw is a monthly dividend payer worth holding in a portfolio.

Check out this renewable utility company

Finally, TransAlta Renewables (TSX:RNW) is a company that monthly income investors should consider holding today. It operates a portfolio of renewable wind, hydro, and gas power generation facilities. All considered, TransAlta Renewable’s portfolio has a generation capacity of about 2,900 megawatts. That makes it a major player in the global renewable utility industry.

Similar to Shaw, TransAlta Renewables isn’t listed as a Canadian Dividend Aristocrat. However, it has also done an excellent job of increasing its dividend over time. Over the past nine years, TransAlta Renewables’s dividend has never seen a decline. It has also grown at a CAGR of about 6%. With a forward dividend yield of 5.24%, TransAlta Renewables should attract many dividend investors hoping to build a source of passive income.

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 Jed Lloren has no position in any of the stocks mentioned. The Motley Fool recommends PEMBINA PIPELINE CORPORATION.

More on Dividend Stocks

money cash dividends
Dividend Stocks

This 8.39% Dividend Stock Can Pay $100 Cash Every Month

Consider investing in this monthly dividend stock at current levels to lock in high-yielding monthly distributions to create a good…

Read more »

TFSA (Tax free savings account) acronym on wooden cubes on the background of stacks of coins
Dividend Stocks

Here’s the Average TFSA Balance in 2024

The Bank of Montreal (TSX:BMO) says that the average TFSA balance is $41,510, far below the maximum.

Read more »

A glass jar resting on its side with Canadian banknotes and change inside.
Dividend Stocks

Investors: Here’s How to Make $1,000 Each Month in Retirement

Here's how you can easily make $1,000 in monthly passive income in retirement in Canada, without taking on too much…

Read more »

man touches brain to show a good idea
Dividend Stocks

3 No-Brainer TSX Stocks I’d Buy Right Now Without Hesitation

Three TSX stocks that continue to overcome massive headwinds and beat the market are no-brainer buys right now.

Read more »

calculate and analyze stock
Dividend Stocks

TFSA Investors: 2 Top TSX Dividend Stocks to Buy on a Dip and Hold Forever

These top TSX dividend stocks now offer attractive yields and big potential capital gains.

Read more »

grow money, wealth build
Dividend Stocks

1 Dividend Stock to Buy for Growth and Stay for a 5.5% Yield

This dividend stock has been rising higher, but more could certainly be on the way. Now is the time to…

Read more »

A worker uses a double monitor computer screen in an office.
Dividend Stocks

2 Affordable Passive-Income Stocks That Pay Monthly

Are you looking for some passive-income stocks to build a recurring income stream? Here are two great options you can…

Read more »

woman data analyze
Dividend Stocks

Magna International Is Starting to Get Ridiculously Oversold

An undervalued stock with strong fundamentals and visible growth potential is a screaming buy for long-term gains.

Read more »