The 2 Best Monthly Dividend Stocks to Buy for Superior Income

Do you want income no matter what? These are the two dividend stocks I’d consider first on the TSX today.

Amy Legate-Wolfe

Author Bio

Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Her work can also be found at Canada's National Observer, where she writes on the business side of climate action. Before joining Motley Fool Canada, Amy wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband.

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Favorite Investment Quote

“October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published March 30, 2023 8:30 am EDT

Right now is one of the best times to lock up a high dividend yield as well as set yourself up before a recession. Yes, it seems a recession is coming. That means we could see shares fall even further. And if that happens, you’ll want monthly paying dividend stocks giving you cash every month.

And right now, these are the two I’d go for on the TSX today.

NorthWest stock

One of the best investments you can make during a downturn is healthcare stocks, but not companies that are trying to push the next big drug. No, invest in healthcare that’s essential and necessary every single day.

And you know what’s necessary? Healthcare properties. That’s why I’ve been investing in NorthWest Healthcare Properties REIT (TSX:NWH.UN) for years now. While it’s still relatively new and has yet to increase its dividend, I would still recommend it. Mainly because NorthWest stock continues to expand. It’s now one of the dividend stocks that offers global assets and continues to find new opportunities.

What’s more, its properties have an occupancy rate at 97% as of writing, with lease agreements at an average of 14 years. So, that’s solid income you can all but guarantee will continue to come in.

The best part, however, is that NorthWest stock is valuable with a super-high dividend yield. It’s one of the dividend stocks offering a yield at a whopping 9.56% and trading at just 7.35 times earnings. So, I would certainly consider this stock for monthly income on the TSX today.

COMPANY	RECENT PRICE	NUMBER OF SHARES	DIVIDEND	TOTAL PAYOUT	FREQUENCY	TOTAL INVESTMENT
NWH.UN	$8.53	100	$0.80	$80	Monthly	$853

TransAlta Renewables

If you want monthly income and to set yourself up for future growth, I would then consider a company like TransAlta Renewables (TSX: RNW). TransAlta stock is a solid choice, as we transition away from oil and gas and towards renewable energy.

Right now, it operates natural gas facilities in Canada, the United States and Australia, pushing out renewable natural gas, but also investing in other areas of renewable energy. This allows investors to grab on to the high price of oil, while also setting themselves up for future growth.

And, again, we have an ultra-high dividend yield among dividend stocks at 7.97% as of writing. Furthermore, shares are down 34% in the last year, and it trades at just 1.8 times book value. So, this is certainly a steal right for long-term investors on the TSX today.

TransAlta stock also has a longer history to look back on. The stock has been under pressure in this environment but will likely rise once more. In the last decade, shares are up 19%. But again, that’s after a huge fall. They first climbed 120% before starting to dip.

Meanwhile, the stock offers a dividend yield at $0.94 per share annually. That comes out monthly, as mentioned, so it’s certainly a reason to pick up this stock now at a much lower price than usual on the TSX today.