2 of the Best Canadian Stocks That Pay Out Monthly

These two of the best Canadian dividend stocks can help you earn monthly passive income for decades.

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After witnessing a sharp correction last year, the TSX Composite Index has seen a healthy recovery in 2023 so far to currently trade with 6.7% year-to-date gains. Despite this recovery, however, market volatility remains high, as macroeconomic concerns keep haunting investors. In such uncertain market conditions, you can invest in monthly dividend stocks to create a reliable stream of steady passive income and multiply your savings in the long run.

Let’s take a closer look at two of the best Canadian monthly dividend stocks you can buy now to earn passive income each month.

One of the best Canadian stocks for monthly passive income

H&R Real Estate Investment Trust (TSX:HR.UN) is one of my favourite monthly dividend stocks to consider in 2023. It’s a North York-based open-ended REIT (real estate investment trust) that has a market cap of $3.3 billion.

Despite the broader market recovery this year, H&R stock currently trades at $12.10 per share without any notable change from its previous year’s closing price, making it look cheap to buy for the long term. At this market price, it offers an attractive 4.9% annual dividend yield and distributes its dividend payouts every month.

One of the main strengths of H&R REIT is its attractive portfolio of high-quality properties worth about $11.4 billion. While residential properties continued to be the biggest part of its portfolio, it also has sizable interests in many well-located retail, office spaces, and industrial assets. Some of its key industrial sector tenants include reputed companies like Canadian Tire, Finning International, Purolator, Deutsche Post, and Unilever Canada.

At the end of 2022, H&R REIT’s portfolio had a solid 96.6% occupancy rate with a weighted average lease term of well more than seven years. These are some of the key factors its adjusted earnings grew positively by 34% in the five years between 2017 and 2022. Considering its continued focus on new developmental projects, you can expect this attractive earnings growth trend to remain intact in the coming years and help this monthly dividend stock rise in value.

And another top monthly dividend stock to buy forever

Mullen Group (TSX:MTL) could be another fundamentally strong dividend stock in Canada to consider right now if you are seeking to earn monthly passive income. This Okotoks-headquartered logistics services provider currently has a market cap of $1.4 billion, as its stock trades at $13.06 per share with about 2.5% year-to-date gains. At the current market price, the annualized dividend yield of this monthly dividend stock stands at 4.8%.

While it’s underperforming the TSX benchmark in 2023, Mullen stock outperformed the index by a big margin in the previous three years by yielding 57% positive returns, despite the broader market selloff.

After posting spectacular organic growth in the last three years, Mullen Group might face challenges in the ongoing year due to inflationary pressures and improving supply chain conditions. Nonetheless, Mullen Group’s strategy to focus on new acquisitions should further improve its financial growth trends in the long run, making it a trustworthy monthly dividend stock to own for years to come.

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 has positions in and recommends Mullen Group. The Motley Fool has a disclosure policy. Fool contributor Jitendra Parashar has no position in any of the stocks mentioned.

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