The 2 Top Monthly Dividend Stocks for March 2023

These are the top two monthly dividend stocks you can buy in Canada in March 2023.

| More on:
A plant grows from coins.

Source: Getty Images

The stock market in Canada has been turbulent lately, as various macroeconomic challenges and the recently emerged concerns about the financial system have hurt investors’ sentiments. These are some of the key reasons why the TSX Composite Index has lost nearly 11% of its value in the last year. In such a difficult market environment, holding some fundamentally strong dividend stocks in your portfolio could minimize your risks and help you earn consistent returns on your investments from dividends.

In this article, I’ll highlight two of the best Canadian monthly dividend stocks you can buy in March 2023.

A top Canadian monthly dividend stock from the energy sector

Irrespective of its dividend yield, investors should always carefully analyze a company’s financial growth track record before investing in its stock. If a company has the ability to maintain good financial growth in the long term, its dividends are also likely to witness growth in the future, even if its dividend yield right now doesn’t look very impressive.

With that principle in mind, Freehold Royalties (TSX:FRU) could be a reliable monthly dividend-paying stock in Canada to consider now. This Calgary-headquartered energy sector-focused royalty firm currently has a market cap of $2.1 billion, as its stock trades at $13.62 per share. At this market price, it offers an annual dividend yield of 7.9% and distributes dividends every month.

After rallying by 217% in the previous two years combined, its share prices have seen nearly 13% value erosion in 2023 so far due mainly to a recent sharp decline in the prices of energy products, especially crude oil. Nonetheless, Freehold’s recent financial growth trend remains strong, as its total revenue in 2022 soared 91% YoY (year over year) to $393 million. Despite weaker commodity prices in the last couple of quarters, stronger drilling activity at its lands pushed its production higher, helping it post a solid 160% YoY increase in its adjusted earnings for the year to $1.38 per share.

As its production levels are expected to increase further in the ongoing year, you can expect its financial growth trends to remain strong, making it worth buying on the dip.

And a top monthly dividend REIT

My second monthly dividend stock to consider in March 2023 is Choice Properties REIT (TSX:CHP.UN). The shares of this Toronto-headquartered real estate investment trust (REIT) have slid 3.7% in 2023 so far to $14.22 per share, taking its market capitalization to $4.7 billion. At this market price, the annualized dividend yield of this monthly dividend stock stands at 5.3%.

Choice Properties is one of the largest REITs in Canada, with a strong portfolio of more than 700 high-quality assets, including retail, industrial, and mixed-use residential properties. More importantly, most of its properties are mainly leased to reliable necessity-based tenants, making its financial growth and cash flows largely predictable.

In the five years between 2017 and 2022, Choice Properties REIT’s total revenue rose 52%. And its adjusted net profit during the same five-year period witnessed a solid positive growth of 84%. As the REIT remains focused on advancing its development pipeline and expanding its industrial asset base, you can expect its financial growth to improve further in the long run, which should help this monthly dividend stock soar.

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 Freehold Royalties. The Motley Fool has a disclosure policy. Fool contributor Jitendra Parashar has no position in any of the stocks mentioned.   

More on Dividend Stocks

Happy family father of mother and child daughter launch a kite on nature at sunset
Dividend Stocks

Parents: Here’s How to Boost Your Monthly Income

Parents, you have enough to worry about. But if you can put aside even $40 per month, that can create…

Read more »

Various Canadian dollars in gray pants pocket
Dividend Stocks

Looking for a Reliable Retirement Income? Consider These Dividend-Paying Stocks

Investors looking to establish a reliable retirement income have no shortage of options to choose from. Here's a trio of…

Read more »

edit Person using calculator next to charts and graphs
Dividend Stocks

3 Oversold Dividend Stocks That Could Make You Rich When They Bounce Bank

Don't wait around for these oversold dividend stocks to bounce back, each certainly will, which is why now is the…

Read more »

A small flower grows out of a concrete crack.
Dividend Stocks

Down 8% Last Month, Canadian Tire Stock Is a Deal Heading Into June 2023

May wasn't a good month for the stock, but June has been different from the beginning and may present an…

Read more »

Canadian Dollars
Dividend Stocks

Need Passive Income Right Now? Turn $20,000 Into $152 Every Month

This dividend stock may be down now, but offers substantial passive income through its 9.31% dividend yield as of writing!

Read more »

Double exposure of a businessman and stairs - Business Success Concept
Dividend Stocks

Is Exchange Income Stock a Buy?

Even within an industry, some stocks might be worth considering in certain market conditions, while others may be avoided.

Read more »

Dividend Stocks

2 Top Canadian Value Stocks in June 2023

Canadian Imperial Bank of Commerce (CIBC) stock is a compelling buy in June, and so is this Canadian REIT.

Read more »

Illustration of bull and bear
Dividend Stocks

2 Cyclical Stocks to Buy Before the Next Bull Market

The TSX index has been cyclical in the past 12 months, with neither a bearish nor a bullish trend fully…

Read more »