2 Best Monthly Dividend Stocks for February 2023

Here are two of the best Canadian monthly dividend stocks you can buy in February 2023.

| More on:
Payday ringed on a calendar

Image source: Getty Images

The year 2023 has begun on a bullish note for the Canadian stock market, as stocks across sectors have seen a sharp recovery this year so far. Notably, the TSX Composite benchmark has recovered by 7% after losing more than 8% of its value last year.

While early signs of easing inflationary pressures seem to have driven this recent market-wide rally, continued rate hikes and slowing global economic growth are still keeping fears of a moderate recession intact. Although you can benefit from the ongoing market recovery by buying some growth stocks right now, you must try to minimize your risks by also including some quality monthly dividend stocks in your portfolio that can help you earn reliable passive income, despite economic uncertainties.

Let’s take a closer look at two of the best Canadian monthly dividend stocks you can buy in February 2023.

My first Canadian monthly dividend stock pick in February

When you’re investing in a monthly dividend stock, you should never ignore the underlying fundamentals of the stock. This is because many dividend-paying companies with weak fundamentals have higher chances of this cutting or discontinuing their dividends in difficult economic environments.

Keeping that principle in mind, Allied Properties REIT (TSX:AP.UN) could be a reliable Canadian monthly dividend stock to consider in February 2023, as its underlying fundamentals look strong. This Toronto-headquartered REIT (real estate investment trust) has a market cap of $3.8 billion after its stock has 18.4% year to date to trade at $29.67 per share. At the current market price, Allied offers an attractive annual dividend yield of 6.1% and distributes its dividend payouts every month.

Allied Properties REIT has a large portfolio of the instinct distinctive urban workspaces across major cities in Canada. At the end of 2022, the value of its asset portfolio stood at $11.9 billion, reflecting a 15% growth over the previous year. Its total revenue fell 8.7% YoY (year over year) last year due to a difficult macroeconomic environment. Nonetheless, Street analysts expect its revenue to jump by more than 30% YoY in 2023, possibly due to improving economic conditions and its consistently expanding asset portfolio, which should help its share price appreciate.

My second monthly dividend stock pick in Canada right now

Dream Industrial REIT (TSX:DIR.UN) could be another safe Canadian monthly dividend stock to add to your portfolio in 2023. It currently has a market cap of $3.6 billion as its stock trades at $14.06 per share with about 23.4% year-to-date gains. At this market price, Dream Industrial offers an attractive yearly dividend yield of 5% and distributes its dividends on a monthly basis.

As its name suggests, Dream Industrial REIT manages a large portfolio of industrial properties across Canada, Europe, and the United States, with a gross leasable area of 46.5 million square feet. Unlike Allied Properties, Dream Industrial REIT’s financial growth remained comparatively unaffected by macroeconomic uncertainties in 2022. As a result, its total revenue jumped by 21.7% YoY in the first three quarters of last year, helping its adjusted earnings grow by 15.7% over the same period a year ago.

Despite its positive financial growth trends, Dream Industrial share prices witnessed a sharp 32% correction last year amid the broader market downturn, making it look cheap. While it has already recovered some of those big losses this year so far, it has the potential to soar further, given its consistently improving average occupancy. These factors make it worth considering as a monthly dividend stock in February 2023.

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.

The Motley Fool recommends Dream Industrial Real Estate Investment Trust. The Motley Fool has a disclosure policy. Fool contributor Jitendra Parashar has no position in any of the stocks mentioned.

More on Dividend Stocks

grow dividends
Dividend Stocks

3 Canadian Stocks With a Real Chance of Doubling Your TFSA’s Value

Three outperforming Canadian stocks can help TFSA investors double their account balances.

Read more »

Hand writing Time for Action concept with red marker on transparent wipe board.
Dividend Stocks

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

At any given time, the market may have certain stocks that offer a powerful combination of reliability, potential, valuation, etc.,…

Read more »

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 »