2023 hasn’t turned out as bad as many would have expected. However, the fear of an economic slowdown and pressure on consumer and enterprise spending has kept the stock market volatile. Despite the volatile environment, investors seeking passive income through Canadian dividend stocks shouldn’t worry much.
Thankfully, the TSX has stocks that pay monthly dividends and high yields, which make them attractive investments to meet your income needs. While dividend-paying stocks help you earn a regular income, one can reinvest the same in shares to create wealth in the long term.
However, one must understand that dividend payments are not guaranteed. Any corporation can suspend or cut dividend payouts amid a tough operating environment. Thus, investors should diversify their portfolios to reduce risk and earn a steady income.
Against this background, I’ll discuss three Canadian stocks that pay monthly dividends and offer high yields, making them attractive passive-income stocks.
SmartCentres Real Estate Investment Trust
Real estate investment trusts, or REITs, are famous for offering higher payouts, making them solid investments to earn passive income. Among top Canadian REITs, investors could consider investing in SmartCentres Real Estate Investment Trust (TSX: SRU.UN). With a best-in-class portfolio of 185 strategically located income-producing properties, it is Canada’s leading fully integrated REIT.
Its solid tenant base and high occupancy position it well to enhance its shareholders’ returns through increased dividend payments. Moreover, most of its debts are of fixed rate, making it less susceptible to rising interest rates.
It’s worth highlighting that 60% of its rents come from creditworthy and essential service providers, including top retailers and banks. Impressively, SmartCentres has a stable tenant base and 98% occupancy rate, which drives its cash flows and dividend payouts. SmartCentres pays a monthly dividend of $0.154 a share, translating into a high yield of 7.07% (based on its closing price of $26.18 on April 28).
NorthWest Healthcare Properties REIT
Like SmartCentres, NorthWest Healthcare (TSX:NWH.UN) is another lucrative investment to earn regular monthly passive income. It owns a geographically diversified and defensive portfolio of healthcare-focused real estate infrastructure, which provides stability, drives cash flow, and enables it to enhance its shareholders’ returns through monthly payouts.
NorthWest Healthcare has a solid tenant base (backed by government funding) and a long lease expiry term (approximately 14 years) which adds stability to its cash flows and offer visibility into future payouts. Furthermore, NorthWest benefits from a high occupancy rate (nearly 97%), and most of its rents have protection against inflation, supporting organic growth.
Overall, its defensive real estate portfolio, expansion in the U.S., strength in the base business, and solid developmental pipeline augur well for future payouts. It pays a monthly dividend of $0.067 a share, reflecting a high yield of 9.82%.
TransAlta Renewables
TransAlta Renewables (TSX: RNW) owns a diversified portfolio of contracted renewable power-generation facilities and other infrastructure assets that help generate solid cash flows to support its dividend payouts.
Its strong balance sheet positions it well to invest in contracted assets that support its payouts. Moreover, its long-term contracts offer stability. Its low-risk business backed by contractual arrangements bodes well for future payouts.
It pays a monthly dividend of $0.078 a share, translating into a dividend yield of 7.43%.
