The Canadian stocks continue to stay volatile amid uncertainty about the future trajectory of the economy. Regardless of where the market moves, investors can continue to earn a steady income through dividend-paying stocks. Thankfully, the TSX has several companies that focus on enhancing their shareholders’ returns through regular payouts and offer attractive yields.
Against this background, I’ll discuss a top dividend-paying stock that offers monthly payouts. Adding this TSX stock to your portfolio could supplement your monthly inflow of cash. Let’s dig deeper.
One stock for steady monthly payouts
While dividend-paying stocks offer regular cash, one must take caution before investing. It’s important to understand that dividend payouts depend on a company’s financial performance. Thus, a company might cut or stop its dividend payouts amid a challenging operating environment. One must assess a stock carefully before investing, as it will reduce future disappointment and ensure a steady income.
Coming back to the monthly paying dividend stock, investors could consider investing in real estate investment trust, or REIT. REITs are famous for offering solid dividends, as they distribute most of their income. Among top Canadian REITs, NorthWest Healthcare Properties (TSX:NWH.UN) could be a solid addition near the current levels.
NorthWest Healthcare pays a stable monthly dividend to its shareholders. Notably, it offers a monthly dividend of $0.067 per share, translating into a high yield of over 10% (based on its closing price of $7.70 on June 13).
Why is NorthWest Healthcare an attractive income stock?
Northwest Healthcare owns a portfolio of healthcare real estate spread across multiple locations, including Canada, the U.S., Australia, Brazil, and Europe. It focuses on high-quality tenants that include hospital operators, rehabilitation clinics, and individual practitioners. Moreover, about 80% of these tenants are backed by government support.
Overall, NorthWest’s geographically diversified portfolio and high-quality tenant base offer stability to its financial performance.
It’s worth highlighting that NorthWest Healthcare had 233 properties at the end of the first quarter, sporting a high occupancy rate of 97%. Furthermore, NorthWest has a weighted average lease expiry (WALE) term of approximately 13.6 years. Also, about 83% of its leases are subject to indexation and are delivering strong same-property net operating income growth of 4.4%.
The REIT’s high occupancy rate, inflation-protected rents, and long weighted average lease expiry term help it to deliver stable cash flows and supports its payouts.
Notably, NorthWest Healthcare’s stock price has witnessed a pullback due to the temporarily elevated leverage, higher interest rates, and lower transaction volumes. This has driven its dividend yield higher. However, the company’s management has taken measures to deleverage its balance sheet. Further, it is selling non-core assets and repaying debt, which is positive.
Bottom line
The easing of inflation and expectations of a pause on interest rate hikes will likely support NorthWest Healthcare. Further, its solid portfolio, ability to generate low-risk cash flows, focus on reducing debt and weighted average interest rates, and increased exposure to fixed-rate debt augurs well for future growth and payouts.
| Company | Recent Price | Number of Shares | Dividend | Total Payout | Frequency |
| NorthWest Healthcare | $7.7 | 1,494 | $0.067 | $100.1 | Monthly |
The table above shows that if you buy about 1,494 shares of NorthWest Healthcare right now, you can earn over $100 in passive income every month. To buy 1,494 shares of NorthWest near the current market price, one would have to invest approximately $11.5K.
