If you’re a long-term investor, it’s highly recommended that you include some quality dividend stocks in your portfolio that can help you earn passive income each month. Here’s a list of three top Canadian monthly dividend stocks you can consider buying at a bargain in May 2023.
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My first Canadian monthly dividend stock for May 2023
For investors seeking to make extra income each month in Canada, Allied Properties REIT (TSX:AP.UN) could be a great stock to consider on the dip in May 2023. It’s a Toronto-headquartered closed-end REIT (real estate investment trust) that owns a high-quality portfolio of urban workspace across Canada.
Allied currently has a market cap of $3.1 billion, as its stock trades at $23.89 per share with about 12% year-to-date losses. At this market price, it offers an attractive 7.5% annualized dividend yield and distributes its dividend payouts every month.
In the first quarter of 2023, Allied REIT’s operating income grew positively by 14.5% year over year, despite macroeconomic uncertainty. As the company remains focused on the continued expansion of its asset base, you can expect its financial growth trends to improve further in the long run.
My second monthly stock pick with strong growth potential
Sienna Senior Living (TSX:SIA) could be another fundamentally strong Canadian monthly dividend stock you can consider buying in May 2023. This Markham-based company provides a variety of living options, including assisted living, independent living, and long-term care, to seniors across Canada.
After losing nearly 27.5% of its value in 2022, SIA stock currently trades without any notable change on a year-to-date basis at $10.89 per share. At market price, this monthly paying dividend stock has an attractive 8.6% dividend yield on an annualized basis.
The occupancy rate at Sienna Senior Living’s retirement communities improved significantly in the last one-and-a-half years amid subsiding COVID-19 related-restrictions. But inflationary pressures and labour shortages continued to take a toll on its bottom line in 2022. Nonetheless, its long-term growth outlook remains strong, as the demand for its services is likely to rocket in the next couple of decades, with an expected consistent increase in the seniors’ population in Canada.
And a monthly paying dividend stock from the energy sector
Higher commodity prices, especially for energy products, have been one of the key reasons for driving inflation up in the last year. While short-term macroeconomic uncertainties have increased the commodity market volatility, the medium- to long-term outlook for oil and gas prices is still strong due to growing supply concerns. Considering that, Freehold Royalties (TSX:FRU) stock could be a great investment, especially if you’re looking to generate passive income each month in Canada.
After delivering 204% positive returns in the previous two years, the shares of this energy-focused royalty firm have dived by 7% in 2023 so far to trade at $14.72 per share. Its annualized dividend yield currently stands at 7.4%.
With the help of a solid post-pandemic recovery in oil and gas prices, the company’s 2022 revenue jumped by 91%, while its adjusted earnings grew at a much higher rate of 160% year over year. Its well-diversified assets and strong financial position should help Freehold continue expanding its business to maintain this strong financial growth trend, making this Canadian monthly dividend stock worth buying on the dip in May 2023.
