As macroeconomic uncertainties have elevated the market volatility in recent years, investors are finding it increasingly difficult to pick stocks for their portfolios that can continue to yield healthy returns. While it’s true that every bear market eventually turns into a bull market, the possibility of a moderate recession could still keep the market unpredictable in the near term. Such difficult economic conditions act as a reminder for long-term investors to hold some dividend stocks in their portfolio that can help them generate steady monthly passive income.
In this article, let’s take a closer look at one such TSX monthly dividend stock you can consider buying right now.
A TSX monthly dividend stock to own forever
If you’re seeking to create a trustworthy source of monthly passive income from stock investing, you should avoid investing in companies with weak fundamental prospects, no matter how attractive their past financial growth trends look. This way, not only can you reduce risks to your portfolio, but you also can expect healthy returns on your investments in the long term.
Considering that, Sienna Senior Living (TSX:SIA) could be worth considering for long-term investors seeking monthly passive income. It currently has a market cap of $803.1 million, as its stock trades at $11.01 per share with a minor 1% year-to-date gain. At this market price, this Markham-headquartered company offers an attractive 8.5% annualized dividend yield, and its dividend distribution takes place every month.
Why invest in this stock now?
Sienna Senior Living has about five decades of experience providing various independent and assisted living options to seniors across Canada. At the end of December 2022, it owned assets worth $1.7 billion with a network of 80 living residences for seniors. Besides that, Sienna also operates 13 third-party residences.
In 2022, Sienna’s total revenue rose 7.5% YoY (year over year) to $718.6 million with the help of continued occupancy gains in its retirement segment. Higher revenue and increasing rental rates for its retirement portfolio also drove its adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) up 6.7% YoY to $118.2 million. However, rising labour costs and other inflationary pressures affected its bottom line. Weaker net profits and a broader market selloff were the top reasons why its share prices tumbled by nearly 28% last year.
While high inflation may continue to take a toll on its profits in the coming quarters as well, Sienna’s long-term growth outlook remains strong, as its operating performance continues to improve with growing demand for its services. Given that, you can expect this Canadian monthly dividend stock to stage a sharp recovery as soon as the macroeconomic concerns gradually start to subside.
|COMPANY||RECENT PRICE||NUMBER OF SHARES||DIVIDEND||TOTAL PAYOUT||FREQUENCY|
|Sienna Senior Living||$11.01||1,000||$0.078||$78||Monthly|
|Prices as of Apr. 20, 2023|
Foolish bottom line
If you buy 1,000 shares of Sienna Senior Living, you can expect to earn $78 in monthly passive income from its quality dividends, which is equivalent to $936 a year. To buy these many stocks at the current market price, you’ll have to invest about $11,010 of your hard and savings in it. Besides this monthly passive income, you can also expect healthy appreciation in Sienna’s share prices in the long run due to its strong long-term fundamentals.