Investors planning to start a passive-income stream could consider investing in stocks that offer monthly payouts. Thankfully, the Canadian stock exchange has several top dividend stocks that provide monthly payouts. Investors can rely on these companies’ shares to boost their monthly income.
But before investing, one should understand that dividend stocks are not risk free, and their payouts are not guaranteed. With this background, let’s zoom in on three TSX stocks to earn monthly passive income.
NorthWest Healthcare Properties REIT
Several REITs (real estate investment trusts) offer monthly payouts, and NorthWest Healthcare Properties REIT (TSX:NWH.UN) is one of the top bets in the REITs space for its defensive business and high yield.
NorthWest owns a diversified portfolio of real estate assets focusing on healthcare operators. Its portfolio includes medical office buildings, hospitals, and clinics that witness high and steady occupancy and support its cash flows. Moreover, it has a high-quality tenant base, with most of them having government support.
For instance, NorthWest Healthcare sports a portfolio occupancy rate of 97%, which is encouraging. Moreover, its leases have a weighted average lease expiry of 14 years. Also, about 81.7% of its consolidated portfolio is backed by rent indexation that supports organic growth. The REIT offers a monthly dividend of $0.067 a share, translating into a stellar yield of over 8.5% (based on its closing price of $9.38 on December 28).
Keyera
Shares of the energy infrastructure company Keyera (TSX: KEY) are a lucrative investment to generate monthly passive income. Keyera owns high-quality, fee-for-service assets that benefit from a high utilization rate and generate ample cash flows to drive its growth projects and dividend payments organically.
It’s worth mentioning that Keyera’s distributable cash flow (DCF)/share has grown at a CAGR (compound annual growth rate) of 8% since 2008. Meanwhile, its dividend grew at a CAGR of 7%.
Looking ahead, Keyera projects its adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) to grow at an average annualized rate of 6-7% through 2025. Its EBITDA will drive its DCF/share and, in turn, its dividend payments. Overall, Keyera’s solid business, growing cash flows, and sustainable payout ratio (50-70%) implies that the company will continue to enhance its shareholders’ returns through higher dividend payments. Keyera pays a monthly dividend of $0.16 per share, reflecting a more than 6.5% yield.
Pembina Pipeline
The final stock on the list is Pembina Pipeline (TSX: PPL). Its highly contracted and diversified energy infrastructure assets generate solid fee-based cash flows that support its monthly payouts. Thanks to its high-quality asset base, Pembina Pipeline has maintained and increased its dividend since 1998. Moreover, in the past decade, Pembina’s dividend grew at a CAGR of 5%.
Pembina recently increased its dividend by 3.6%. Moreover, it offers a high yield of 5.7%. Further, its focus on optimizing its assets and driving utilization bode well for growth and will likely support its future payouts.
Bottom line
These monthly paying Canadian stocks can be relied upon to generate steady passive income. Further, these companies offer high yields, which will boost your monthly cash inflow.
| Company | Recent Price | Number of Shares | Dividend | Total Payout | Frequency |
| NorthWest Healthcare | $9.38 | 1066 | $0.067 | $71 | Monthly |
| Keyera | $29.33 | 341 | $0.16 | $55 | Monthly |
| Pembina Pipeline | $45.69 | 219 | $0.217 | $47 | Monthly |
The table shows that a $10K investment in each of these monthly paying TSX stocks could help you earn approximately $173 in passive income.
