The need to cope with inflation is more pressing today than yesterday. Fortunately, people with no time for side hustles can keep it simple and exert little effort. Passive investing in dividend stocks is a way to go to create extra cash.
Most TSX dividend stocks pay quarterly dividends. However, if the intention is to incorporate dividend earnings with monthly budgets to cover living expenses, three Canadian firms are reliable monthly dividend payers.
Industrial
Chemtrade Logistics Income Fund (TSX: CHE.UN) is a leading provider of industrial chemicals in Canada, the U.S., and South America. Market analysts are bullish and see the industrial stock as a screaming buy in 2023. After three consecutive years of losses (2019 to 2021), a remarkable turnaround happened.
In 2022, net earnings topped $109 million compared to the $235 million net loss in 2021. The top line jumped 32.5% year over year to $1.8 billion. This $962.7 million company derives revenue from two strategic business segments: Sulphur & Water Chemicals (SWC) and Electrochemicals (EC). Both segments sell high-quality industrial chemicals.
The financial results to start this year are more impressive. In Q1 2023, revenue rose 20.7% year over year to $471.2 million, while net earnings soared 644% to $79.5 million versus Q1 2022. Management expects another record year in 2023 due to Chemtrade’s market leadership position and continued strength across the core businesses.
Moreover, global supply dislocations and elevated overseas energy costs give its EC business an advantaged competitive position for the next several years.
Utility
A utility stock like Northland Power (TSX: NPI) stabilizes any dividend stock portfolio. The $7 billion independent power producer owns and operates renewable power infrastructure assets (solar and wind) and produces electricity from clean-burning natural gas.
You’re buying on temporary weakness at $27.58 per share (-24.6% year to date). Meanwhile, the 4.35% dividend yield should compensate for the underperformance. The payouts stand on solid ground as Northland generates predictable cash flows from long-term revenue contracts.
In Q1 2023, net income declined 63% year over year to $107.1 million, although it isn’t alarming since Northland Power is a renewable powerhouse in the making.
Its regional presence (North America, Latin America, Europe, and Asia), diversified portfolio of assets, and multiple technologies are competitive advantages. Management will also leverage its global development offices to source growth opportunities.
Real estate
Industrial is the most stable sub-sector in the real estate industry today, and Dream Industrial (TSX: DIR.UN) is the most reliable monthly dividend payer. At $13.39 per share, the real estate investment trust (REITs) outperforms the broader market year to date, +16.91% versus +1.90%. The dividend yield is 5.23%.
This $3.7 billion REIT sustains organic growth through robust leasing momentum and attractive rental spreads in in-demand industrial properties (321). In Q1 2023, net rental income and funds from operations rose 25% and 20% to $81.5 million and $68.1% versus Q1 2022.
Its CEO, Brian Pauls, said Dream has one of the largest industrial platforms in Canada following the acquisition of rival Summit Industrial. Besides several growth opportunities, Pauls expects industrial fundamentals to remain robust. The high-quality global portfolio should continue to outperform.
More options
Another advantage of monthly dividends is the faster compounding of capital when you immediately reinvest the dividends. You can also set aside the dividends as cash reserves or rainy-day funds.
