Most dividend stocks pay quarterly dividends, although Canadians seeking to augment their monthly paycheques can go for monthly dividend payers. The top picks on the TSX are Savaria Corporation (TSX:SIS), Atrium Mortgage Investment Corporation (TSX:AI), and Boston Pizza Royalties Income Fund (TSX:BPF.UN).
Accessibility and mobility champion
Savaria is the champion in accessibility and personal mobility. The $1.1 billion company manufactures home elevators, commercial lifts, stairlifts, ceiling lifts, and adapted vehicles to improve people’s mobility and make life more accessible. It has been operating for 34 years with more room to grow because of the aging population.
The manufacturing facilities in North America, Europe and China enable the company to reach global markets. In Q1 2023, all business segments – Accessibility (14.4%), Patient Care (13.2%), and Adapted Vehicles (3.7%) – reported meaningful organic growth versus Q1 2022.
In the three months that ended March 31, 2023, consolidated revenue and net earnings rose 15.3% and 12.9% year over year to $211.6 million and $6.03 million, respectively. Savaria’s President and CEO, Marcel Bourassa, said it was a beautiful start this year considering the perennial weather constraints every first quarter.
Bourassa adds that management targets $1 billion in revenue by 2025 and expects more growth after that. At $16.90 per share (+22.45%), the dividend yield is 3.1%.
Conservative lending program
Atrium reported record quarterly net income despite concerns about rising mortgage costs. In Q1 2023, net income climbed 34.1% to $14.2 million versus Q1 2022. This $488.8 million non-bank lender provides residential and commercial mortgages in Canadian urban centres where the real estate sectors are stable and have high liquidity.
The conservative risk parameters of its lending program are why Atrium can provide stable and secure dividends to investors and preserve shareholders’ equity. About 95.4% of the high-quality portfolio are first mortgages, while the average loan-to-value ratio is 60.8%.
Its CEO, Robert Goodali, said, “We continue to lend defensively given soft real estate market conditions and uncertainties in the broader economy.” He is confident that Atrium can manage through the current real estate cycle. At $11.16 per share (+7.41% year to date), the dividend yield is a mouth-watering 8.07%.
Resilient restaurant operations
Boston Pizza’s restaurant operations have been resilient, notwithstanding the current macroeconomic conditions and strong headwinds in the restaurant industry. The $351.9 million income fund collects royalties from the sales of 377 restaurants in its royalty pool.
In Q1 2023, net and comprehensive income declined 48.3% year over year to $6.7 million. Management attributes the drop to the $9.3 million increase in fair value loss. Nonetheless, the significant increases in Franchise Sales (25.5% to $224.2 million) and cash flows generated from operating activities (38.6% to $9.2 million) versus Q1 2022 indicate positive sales momentum.
Its President, Jordan Holm, also said the sales level has returned to more normal levels when compared to the pre-pandemic level. At $16.35 per share, current investors enjoy an 11.3% year-to-date gain on top of the juicy 7.45% dividend.
Re-investing and power of compounding
Besides more frequent monthly payouts, Savaria, Atrium, and Boston Pizza trade at less than $20 per share and pay attractive dividends. Prospective investors can generate generous monthly passive income and not touch the principal. Moreover, you can reinvest dividend earnings 12 times a year instead of four for faster compounding of capital.