Creating a reliable source of monthly passive income in Canada could be easier than you think if you make efforts in the right direction at the right time. The Toronto Stock Exchange offers plenty of opportunities for dividend investors that can make their dream of earning monthly passive income for years come true.
In this article, I’ll highlight two top TSX dividend stocks you can buy now to start generating passive income each month.
TransAlta Renewables stock
TransAlta Renewables (TSX:RNW) could be one of the best TSX dividend stocks to buy for monthly passive income, especially if you want to benefit from a consistently growing demand for renewable energy. This Calgary-based company, with a market cap of $3.5 billion, primarily focuses on renewable power generation. Besides eight natural gas-fueled power-generation plants, TransAlta Renewables also has an interest in two solar, 26 wind, and 11 hydroelectric facilities.
After losing 40% of its value in 2022, its share prices have already recovered by 16.2% this year so far to $13.07 per share, outperforming the main TSX index. At this market price, RNW stock offers a 7.2% annual dividend yield and distributes its dividend payouts each month.
As recent lower-than-normal wind conditions in Canada affected its performance, its first-quarter revenue dived by 16.8% YoY (year over year) to $119 million. Nonetheless, asset impairment reversals, lower depreciation, and higher finance income pushed TransAlta Renewables’s adjusted quarterly earnings up by 13.3% YoY to $0.17 per share. The renewable energy firm expects a full return to service of its Kent Hills wind facilities in the second half of 2023. Given that, you can expect its financial growth trends to showcase improvements in the coming quarters and push this TSX monthly dividend stock higher.
Sienna Senior Living stock
Sienna Senior Living (TSX:SIA) is another reliable monthly dividend stock in Canada to consider now. This seniors’ living options provider, with a market cap of $823.4 million, is based in Markham, Ontario. The company distributes its dividends every month, and its annualized dividend yield stands at 8.3% at the current market price of $11.31 per share.
On May 11, Sienna Senior Living announced its first-quarter results that reflected a consistent recovery in demand for its services in the post-pandemic era. In the March quarter, the company’s total adjusted revenue rose 14.5% YoY to $199.6 million with the help of occupancy improvements and rental rate increases. Similarly, Sienna’s same property net operating income for the quarter climbed by nearly 10% YoY to $34.7 million, pushing its total net operating income up by 13% from a year ago to $36.3 million. With the recent pause in interest rate hikes and easing inflationary pressures, the company’s cost pressures may reduce in the coming quarters and help it post strong financial results in 2023.
Moreover, I also expect big improvements in its financial growth trends in the long run as the seniors’ population in the 85-plus age group is estimated to surge in the next couple of decades, which should accelerate the demand for Sienna’s long-term-care, assisted living, and retirement communities further. These positive factors make it a trustworthy TSX monthly dividend stock to add to your portfolio now.