If you’re looking to earn passive income in Canada, you may want to invest in monthly dividend stocks. This is because dividend investing provides a great deal of flexibility for those seeking passive income.
In this article, I’ll talk about three of the best Canadian stocks that can help you earn $100 in dividend income each month or $1,200 a year with an investment of $15,516.
Image source: Getty Images
NorthWest Healthcare Properties stock
Northwest Healthcare Properties REIT (TSX:NWH.UN) is among the most attractive Canadian monthly dividend stocks right now. This Toronto-headquartered real estate Investment trust (REIT) has a strong portfolio of over 230 healthcare sector-focused properties across key markets globally. The REIT currently has a market cap of $2.4 billion, as its stock trades at $9.82 per share after climbing 3.4% in 2023 so far.
Most of NorthWest’s properties are leased to hospitals and other healthcare facilities. At the end of the September 2022 quarter, the occupancy rate of its properties stood strong at 22%, while its weighted average lease to expiry was around 14 years, reflecting the strength of its underlying business model. Currently, NorthWest Healthcare offers an attractive yearly dividend yield of 8.1%.
TransAlta Renewables stock
If you’re willing to invest in monthly dividend stocks with huge future growth potential, you should consider TransAlta Renewables (TSX: RNW). Besides natural gas, as its name suggests, this Calgary-headquartered company mainly focuses on producing power using renewable resources like wind, hydro, and solar. Currently, RNW stock trades at $12.06 per share with a market cap of $3.2 billion after adding 7.2% value this year.
In the five years between 2016 and 2021, TransAlta’s total revenue rose about 82%, while its adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) jumped by 163%. Although its continued focus on expanding its business further has increased its costs in recent years, these investments are likely to pay off well in the long term and help its stock soar. At the time of writing, TransAlta Renewables has an annual dividend yield of about 7.8%.
Sienna Senior Living stock
Just like the other two stocks that I’ve mentioned above, Sienna Senior Living (TSX: SIA) could be another fundamentally solid Canadian monthly dividend stock to consider right now. Its share prices have risen 15.6% this year to $12.60 per share, taking its market cap to $919 million.
The Canadian company provides a variety of independent and assisted living options to seniors across Canada, with most of its assets located in British Columbia, Ontario, and Saskatchewan provinces. In five years between 2016 and 2021, Sienna’s total revenue and adjusted earnings grew positively by 34% and 15%, respectively. While its recent financial growth trend might not look very impressive, I expect this trend to improve significantly, as the demand for seniors’ living options is expected to rise massively in the long run. SIA stock’s annual dividend yield currently stands close to 7.4%.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | INVESTMENT | DIVIDEND PER SHARE | TOTAL PAYOUT (Monthly) | DIVIDEND FREQUENCY |
| NorthWest Healthcare Properties REIT | $9.82 | 450 | $4,419 | $0.06667 | $30 | Monthly |
| TransAlta Renewables | $12.06 | 450 | $5,427 | $0.07833 | $35 | Monthly |
| Sienna Senior Living | $12.60 | 450 | $5,670 | $0.078 | $35 | Monthly |
| Total | $15,516 | $0.223 | $100 | |||
| Prices as of Feb. 17, 2023 |
Bottom line
To generate a $100 monthly dividend income (equivalent to 1,200 a year), you can buy 450 shares of NorthWest, TransAlta Renewables, and Sienna Senior Living each. To buy these many shares at their current market prices, you need a total investment of $15,516. As I said at the start of this article, dividend investing is flexible, as you can increase or decrease your total investment in these stocks to adjust the amount you wish to receive in monthly passive income. But never forget to diversify your portfolio to keep your risks low.
