How to Invest to Make $100 per Month

Income investors aiming to make at least $100 in passive income per month can invest in two high-yield TSX stocks paying monthly dividends.

| More on:
Hour glass and calendar concept for time slipping away for important appointment date, schedule and deadline

Image source: Getty Images

Income investors can generate passive income through dividend investing. However, if the goal is specific, two high-yield TSX stocks paying monthly dividends can generate your desired amount.

The average dividend yield of Freehold Royalties Ltd. (TSX:FRU) and Chemtrade (TSX:CHE.UN) is 7.46%. Assuming you allocate $8,050 for each stock ($16,100 total investment), you can make $100 in monthly passive income.   

Record-setting achievements

Freehold Royalties should attract more investors in 2023 after several record-setting achievements last year. The $2.2 billion energy royalty company is benefitting from its “new look” due to the enhanced scale of the business. At $14.86 per share (-4.48% year-to-date), you can partake in the 7.19% dividend.

Dividends also increased 500% from COVID-related lows, and despite lower commodity prices, Freehold can sustain higher payouts. Last year, the $141.6 million total dividend payment was 128% higher than in 2021. Notably, the payout ratio was only 45%. Management said it could maintain the current dividend level even if lower commodity pricing persists.

Freehold owns the most extensive non-government portfolio of oil & natural gas royalties. The royalty oil and gas company has 18,000 producing wells and collects royalty streams from 380 top drillers. Because of the intense focus on business development and accretive acquisitions, the land base in North America is still expanding.  

For the full-year 2022, royalty and other revenue reached $393 million, an 88% year-over-year increase and a new record for Freehold. Net income increased exponentially by 190% to $209.2 million compared to 2021. Management is committed to delivering growth and lower-risk attractive shareholder returns over the long term.

Robust fundamentals

Chemtrade should be on investors’ watchlists following a record year in 2022. Expect interest in this small-cap stock to heighten further if the Q1 2023 results coming out on May 10, 2023, are equally stellar. The $878.8 million company supplies high-quality industrial chemical products in North America and other international markets.

The Sulphur and Water Chemicals (SWC) and Electrochemicals (EC) businesses are major revenue contributors. These core segments cater to various industries, including water treatment, agriculture, pulp and paper, oil refining, and food production. However, management sees continued tailwinds in electro-chemicals in the next few years.

For the full-year 2022, net earnings reached $109.1 million compared to a $235.2 million net loss in 2021. Meanwhile, cash flows from operating activities soared 68.6% year over year to $369.2 million. If you invest today, the share price is $7.60 (-13.87% year-to-date), with a corresponding dividend yield of 7.72%.

In Q4 2022 alone, the operating segments combined to post strong double-digit growth in revenue (a 29% increase to $456.7 million from Q4 2021). President and CEO, Scott Rook, said, “The fourth quarter of 2022 marked a strong end to a record year for Chemtrade.”

Rook adds that Chemtrade isn’t struggling with significantly higher energy costs compared to competitors because it has access to low-cost, regulated renewable hydropower. He sees a bright outlook and expects the organic growth projects in the pipeline to generate an incremental $75 million of adjusted EBITDA over the next five years.   

Monthly dividend advantage

Many income investors prefer receiving monthly dividends over quarterly payouts because you can incorporate them within your monthly budget. Your capital will also compound faster if you can reinvest the dividends 12 times a year, instead of 4.

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.

Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool recommends Freehold Royalties. The Motley Fool has a disclosure policy.

More on Dividend Stocks

Two seniors float in a pool.
Dividend Stocks

TFSA: How to Earn $1,890 in Annual Tax-Free Income

Plunk these investments into your TFSA to earn passive income and avoid the taxman.

Read more »

Engineers walk through a facility.
Dividend Stocks

1 TSX Stock I Wouldn’t Touch With a 10-Foot Pole

AtkinsRéalis (TSX:ATRL) is one TSX stock I'd never invest in.

Read more »

edit Woman in skates works on laptop
Dividend Stocks

3 No-Brainer Stocks to Buy Under $30

These three stocks all offer a huge deal for investors looking for dividends, as well as growth that will last.

Read more »

You Should Know This
Dividend Stocks

How to Convert a $300 Monthly Investment Into $338 in Monthly Income

If you want a certain amount in monthly passive income, invest a similar amount today and leave the rest to…

Read more »

Increasing yield
Dividend Stocks

3 Income Stocks With Big Yields to Consider in April 2024

If you haven’t yet made your March investments, here are three income stocks to buy the dip and lock in…

Read more »

Senior Man Sitting On Sofa At Home With Pet Labrador Dog
Dividend Stocks

RRSP Investors: Don’t Miss Out on This Contribution Hack!

This hack has so many benefits for you -- not just when you put it in your RRSP but for…

Read more »

A red umbrella stands higher than a crowd of black umbrellas.
Dividend Stocks

Passive Income: 2 Safe Dividend Stocks to Own for the Next 10 Years

Dividend stocks such as Manulife and Fortis can help you generate a stable and recurring passive-income stream.

Read more »

Young woman sat at laptop by a window
Dividend Stocks

3 Dividend Stocks Everyone Should Own for the Long Haul

For investors looking for top-tier dividend stocks to buy and hold for the long term, here are three of my…

Read more »