As macroeconomic uncertainties continue to keep the stock market volatile, investors are flocking to add the shares of fundamentally strong dividend-paying companies. While Canadian dividend stocks can help you earn handsome monthly passive income, the question that most often arises is, “How much do you need to invest to create a reliable stream of passive income?”
In this article, we delve into this vital question. But first, let’s take a closer look at two of the best Canadian monthly dividend stocks that look attractive to buy now.
TransAlta Renewables stock
TransAlta Renewables (TSX: RNW) is a Canadian energy company with a market cap of $3.1 billion that primarily focuses on producing power using renewable resources. Its stock currently trades at $11.79 per share with 4.8% year-to-date gains. RNW offers an attractive 8% annualized dividend yield at the current market price and distributes its dividend payouts among investors every month.
In the first quarter of 2023, TransAlta Renewables posted a 16.8% YoY (year-over-year) decline in its total revenue to $119 million as lower wind resources affected its production. Nonetheless, higher interest income and lower sustaining capital expenditures kept optimism alive by driving its adjusted earnings up by 13.3% YoY to $0.17 per share.
As it continues the rehabilitation work of the Kent Hills wind facilities, TransAlta Renewables’s production and financial growth trends are expected to improve in the second half of 2023, which could help this Canadian monthly dividend stock inch up.
Sienna Senior Living stock
If you want to generate monthly passive income, Sienna Senior Living (TSX: SIA) could be another reliable stock to consider now. It’s a Markham-based company with a market cap of $840.6 million that provides a variety of assisted and independent living options to seniors in Canada. After rising by 5.7% on a year-to-date basis, its stock currently trades at $11.52 per share. At this market price, the company offers an 8.1% annual dividend yield.
After facing big challenges due to COVID-19-related restrictions in 2020, the demand for Sienna’s retirement and long-term-care segments has seen a gradual recovery in the last couple of years. In the first quarter this year, the company reported an 11% YoY increase in its retirement segment’s same-property net operating income (NOI). Similarly, same-property NOI in the long-term-care segment improved by 9.1% from a year ago.
Besides these recent gains in its NOI, rising rates for its services and improving occupancy at its properties should also help Sienna remain on the path to a healthy financial recovery in the coming quarters. Given that, the share prices of this monthly dividend-paying company could soar.
Invest now to earn $1,000 in monthly passive income
| COMPANY | RECENT PRICE | NUMBER OF SHARES | INVESTMENT | DIVIDEND PER SHARE | TOTAL PAYOUT (Monthly) | DIVIDEND FREQUENCY |
| TransAlta Renewables | $11.79 | 6,384 | $75,267 | $0.078 | $498 | Monthly |
| Sienna Senior Living | $11.52 | 6,411 | $73,855 | $0.07833 | $502 | Monthly |
| Total | $149,122 | $0.15633 | $1,000 | |||
| Prices as of June 15, 2023 |
If you want to earn roughly around $1,000 in monthly passive income from these two dividend stocks, you can buy 6,384 shares of TransAlta Renewables and 6,411 shares of Sienna. To buy these many shares at their current market prices, however, you’ll need a total investment of around $149,122.
While this example aims to give you a good idea of how easy it could be to earn monthly passive income from Canadian dividend stocks, I highly recommend that you avoid investing such a large amount of money in one or two stocks, especially if you don’t have a very high-risk appetite. Instead, you should always try to diversify your portfolio by adding more such quality dividend stocks to it.
