Investors seeking regular passive income can turn to dividend-paying stocks to earn steady monthly cash. While Canadian stocks could stay volatile amid macro uncertainty and rising interest rates, top dividend-paying stocks could continue to provide stable income regardless of where the market moves. So, investors may want to consider adding shares of companies that offer attractive yields and strive to enhance their shareholders’ returns through regular payouts.
Against this background, let’s look at a top Canadian dividend-paying stock that pays cash every month. Investors can supplement their monthly income by adding this stock to their portfolios.
One stock for steady monthly payouts
Before discussing the stock, it is important to highlight that dividend payments depend on a company’s financial and operating performance. Thus, dividend payouts are not guaranteed, and one must focus on diversifying their portfolio rather than relying on a single stock.
Returning to the dividend-paying dividend stock, investors could consider investing in a REIT (Real Estate Investment Trust). REITs distribute most of their earnings through dividends, making them an attractive option to earn monthly income. While the TSX has several top-quality REITs, NorthWest Healthcare Properties (TSX:NWH.UN) looks attractive near the current levels.
NorthWest Healthcare pays a monthly dividend of $0.067 a share. Further, it offers a high yield of more than 12% (based on its closing price of $6.44 on July 5).
Why is NorthWest Healthcare a dependable income stock?
Northwest Healthcare owns a defensive portfolio of healthcare-focused real estate. Further, its real estate properties are geographically diversified across Canada, Australia, the U.S., Europe, and Brazil. Besides benefiting from its strong real estate portfolio, it gains from its high-quality tenant base, including hospital operators and rehabilitation clinics. It’s worth highlighting that more than 80% of its tenants are with government support.
Overall, its healthcare-focused real estate consistently generates solid cash flows helping it to enhance its shareholders’ returns through monthly payouts.
NorthWest Healthcare owns 233 properties with a high occupancy level of 97%. The REIT has a long average lease expiry term of 13.6 years. Its high occupancy rate and long lease expiry term add stability and visibility to its future cash flows. Furthermore, nearly 83% of its rents are indexed for inflation, which positions it well to deliver solid same-property net operating income.
While NorthWest’s global scale and defensive operating fundamentals bode well for growth, its stock has witnessed a correction due to the higher interest expenses owing to the increase in its debt levels and rising rates.
Nonetheless, NorthWest Healthcare is focusing on reducing debt. Further, the company is selling non-core assets and implementing a hedging program to increase its exposure to fixed-rate debt, lower interest expense, and stabilize earnings.
While the REIT is under pressure due to a temporary elevation in debt, its defensive portfolio, high-quality tenant base, and focus on stabilizing earnings augur well for future growth and dividend payouts.
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The table above shows that an investment of $9.65K in NorthWest Healthcare stock near the current levels could help you buy 1,498 shares, which will generate $100 in passive income per month.