Although there are signs of inflation cooling down, the solid economic data, with business activity in the United States rebounding in February, has raised fears that the federal reserve would continue with its monetary tightening policies. So, the equity markets could remain volatile in the near term.
In this uncertain outlook, investors should look to boost their passive income by adding high-yielding dividend stocks. The following three TSX stocks pay monthly dividends and are available under $20.
Pizza Pizza Royalty
Pizza Pizza Royalty (TSX:PZA) is an excellent dividend stock to have in your portfolio due to its stable cash flows and a high dividend yield of 6%. The company has adopted a highly franchised business model, collecting royalties from its franchisees based on their sales. So, inflation would not have a significant impact on its financials. Its solid same-store sales growth has generated substantial cash flows, thus allowing the company to raise its dividends three times last year. Its yield for the next 12 months stands at an attractive 5.98%.
Meanwhile, Pizza Pizza Royalty focuses on introducing on-trend menu items, creative marketing campaigns, and expanding its footprint by opening new restaurants to drive sales. Over the last few months, the company opened 45 new restaurants, thus adding them to the company’s royalty pool from January 1. Renovating old restaurants and strengthening digital and delivery channels could continue to boost its sales, thus allowing the company to maintain its payouts.
TransAlta Renewables (TSX:RNW) is another excellent dividend stock to have in your portfolio. The renewable energy company sells a substantial percentage of the power produced from its facilities through long-term contracts, which shields its financials from prices and volume fluctuations. However, amid the challenging environment, the company’s management has stated that it would allocate a significant chunk of its cash flows to pay dividends, thus hindering its growth initiatives.
Meanwhile, the company’s management is optimistic about returning its Kent Hills facility to service in the second half of this year. Also, the company hopes to put several other projects into service this year, thus driving its financials. Meanwhile, the company’s management expects its adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) to come in the range of $495-$535 million, representing a marginal improvement of 2% from its previous year. So, I believe the company’s dividend is safe.
Amid the rising interest rates and weakness in the renewable space, TransAlta Renewable has lost around 40% of its stock value compared to its 52-week high. Amid the selloff, the company’s dividend yield has increased to 8%, making it an attractive buy for income-seeking investors.
NorthWest Healthcare Properties REIT
NorthWest Healthcare Properties REIT (TSX:NWH.UN) owns and operates healthcare properties across multiple countries. So, given its defensive and diversified healthcare portfolio, tenants with government backing, and long-term lease agreements, the company’s occupancy and collection rate remain high, irrespective of the economic cycle. Its inflation-indexed rent shields its financials from price rises.
Additionally, NorthWest Healthcare completed acquisitions worth $125 million in the November-ending quarter. It has also formed a joint venture to expand its footprint in the United Kingdom. Along with these growth initiatives, the company’s solid underlying businesses make its dividends safer. Meanwhile, the company’s dividend yield for the next 12 months stands at an attractive 8.2%, making it an ideal stock to have in your portfolio.