Maximize Your Passive Income With These TSX Dividend-Payers

Given their growth prospects, stable cash flows, and high yields, the following three TSX dividend payers can boost your passive income.

| More on:
Payday ringed on a calendar

Image source: Getty Images

Investing in high-yielding monthly-paying dividend stocks would be one of the convenient ways to boost passive income. Secondary or passive income can help investors mitigate some of the impacts of price rises in this inflationary environment.

However, investors must be careful while choosing stocks, as ongoing rate hikes by central banks worldwide have dented the financial health of several Canadian companies. Here are my three top TSX picks to boost your passive income.

NorthWest Healthcare Properties REIT

NorthWest Healthcare Properties REIT (TSX:NWH.UN) is an excellent monthly-paying dividend stock to have in your portfolio, given its defensive healthcare portfolio, high occupancy rate, inflation-indexed rent, and high dividend yield. It enjoys a high-occupancy rate of 97%, with the weighted average of its lease expiration at 14 years. Besides, with 83% of its rent indexed to inflation, it is protected against rising prices.

Further, NorthWest Healthcare is working on lowering its debt levels amid rising interest rates. It has identified around $330 million worth of non-core assets, which it expects to sell in the second and third quarters. Along with the sale of non-core assets, the initiatives to lower its stake in its United States and United Kingdom joint ventures could generate net proceeds of around $550–$600 million. With these funds, the company plans to pay off high-interest rate bearing debt. Amid these initiatives, management hopes to grow its AFFO (average fund flows from operations) per unit by 20% this year, making its future dividend payouts safer.

Meanwhile, NorthWest Healthcare has lost a substantial percentage of its stock value over the last few months and trades close to its 52-week low due to rising interest rates. Amid the steep correction, its dividend yield has increased to 10.2%, making it an attractive buy.

Pizza Pizza Royalty

Pizza Pizza Royalty (TSX:PZA) would be another solid monthly-paying dividend stock to have in your portfolio. Given its highly franchised business model, its cash flows are mostly stable. The company collects royalties from franchises based on their sales, not earnings. So, rising prices will have a minimal impact on the company’s financials.

Notably, the pizza chain posted a solid first-quarter performance, with its same-store sales and adjusted EPS (earnings per share) growing by 13.6% and 16.2%, respectively. The company’s solid value messaging, promotional activities, and price hikes drove its sales. Meanwhile, the uptrend in its financials could continue as it focuses on expanding its presence. It expects to increase its restaurant count by 3-4% this year, with a target of reaching 1,000 restaurants over the next few years. So, I believe this dividend-payer is well-equipped to continue with its dividend growth.

Supported by its solid financials, Pizza Pizza Royalty raised its monthly dividends by 3.6% to $0.0725, with its yield for the next 12 months at 5.92%.

TransAlta Renewables

TransAlta Renewables (TSX:RNW) is a power-producing company that focuses on renewable energy. It sells most of the power produced from these facilities through long-term PPAs (power-purchasing agreements), which offer stability to its financials from price and volume fluctuations.

In the recently reported first-quarter earnings, the company’s revenue and adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) declined by 6.9% and 7.9%, respectively. Lower wind resources and unplanned outages across the segments dragged its production volumes and revenue down. Along with lower revenue, higher operations, maintenance, and administrative expenses pulled the company’s adjusted EBITDA down.

However, the rehabilitation of the 13 wind towers at Kent Hills is progressing in line with expectations, and the company’s management is optimistic about putting these facilities into service this quarter. Besides, the company expects to begin the commercial operation of its Northern Goldfields facility and complete the expansion of its Mount Keith project this quarter. These growth prospects could boost TransAlta Renewables’ cash flows, thus making its monthly payouts safer. Meanwhile, the company currently pays a monthly dividend of $0.07833/share, with its yield for the next 12 months at 7.41%.

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 Rajiv Nanjapla has no position in any of the stocks mentioned. The Motley Fool recommends NorthWest Healthcare Properties Real Estate Investment Trust. The Motley Fool has a disclosure policy.

More on Dividend Stocks

Various Canadian dollars in gray pants pocket
Dividend Stocks

Passive Income: How to Make $90 Per Month Tax Free

You can add this amazing Canadian monthly dividend stock to your TFSA now to generate $90 in tax-free monthly passive…

Read more »

A golden egg in a nest
Dividend Stocks

Investing for Retirement? Check Out These Dividend-Paying Stocks in Canada

Dividend-paying stocks like First National Financial are on sale in June 2023.

Read more »

The sun sets behind a high voltage telecom tower.
Dividend Stocks

Fortis Stock Is a Steady Dividend Player for Your Energy Portfolio

You can rely on Fortis stock for growing dividend income. Aim to buy the stock on market corrections to boost…

Read more »

Path to retirement
Dividend Stocks

Investing for Retirement? These Dividend Stocks Can Help You Get There

TD Bank and Brookfield Renewable Partners are two solid dividend-growth stocks to hold for decent total returns through retirement.

Read more »

Happy family father of mother and child daughter launch a kite on nature at sunset
Dividend Stocks

Parents: Here’s How to Boost Your Monthly Income

Parents, you have enough to worry about. But if you can put aside even $40 per month, that can create…

Read more »

Various Canadian dollars in gray pants pocket
Dividend Stocks

Looking for a Reliable Retirement Income? Consider These Dividend-Paying Stocks

Investors looking to establish a reliable retirement income have no shortage of options to choose from. Here's a trio of…

Read more »

edit Person using calculator next to charts and graphs
Dividend Stocks

3 Oversold Dividend Stocks That Could Make You Rich When They Bounce Bank

Don't wait around for these oversold dividend stocks to bounce back, each certainly will, which is why now is the…

Read more »

A small flower grows out of a concrete crack.
Dividend Stocks

Down 8% Last Month, Canadian Tire Stock Is a Deal Heading Into June 2023

May wasn't a good month for the stock, but June has been different from the beginning and may present an…

Read more »