Dividend stocks can help investors earn a steady stream of recurring income, which can either be reinvested or withdrawn. Generally, dividends are distributed to shareholders once every quarter. But a few TSX dividend stocks have a monthly payout as well.
Before investing in dividend stocks, investors should understand that the payouts are not guaranteed and can be revoked or reduced if company financials deteriorate. So, it’s crucial to identify companies with strong balance sheets, predictable cash flows, and widening profit margins.
Ideally, you would like the payouts to increase each year and also benefit via long-term capital gains. Here are three top TSX dividend stocks that provide you with a monthly income in 2023.
Savaria stock
One of the major players in the accessibility business, Savaria (TSX: SIS) provides solutions for the elderly and physically challenged. It designs, manufactures, installs, and distributes equipment such as stairlifts, vertical and inclined wheelchair lifts, and elevators for home and commercial use.
Valued at a market cap of $1.1 billion, Savaria stock has already returned over 1,000% to shareholders in dividend-adjusted gains since July 2013. The company pays shareholders a monthly dividend of $0.043 per share, translating to a dividend yield of 3.1%.
Despite its outsized gains, Savaria stock is priced at 26 times forward earnings, which is not too steep. Analysts expect Savaria to increase earnings by 18% in 2023 and 40% in 2024, which will allow the company to increase dividends in the near term.
Savaria stock is also priced at a discount of 31% to consensus price target estimates.
Exchange Income stock
Another TSX stock that is flying under the radar, Exchange Income (TSX: EIF) should be on your shopping list right now. The companyâs operating segments are strategic business units that offer different products and services. It has two business segments, Aviation Services & Aerospace and Manufacturing.
In the last 10 years, Exchange Income stock has returned 287% valuing the company at $2.4 billion by market cap. It currently pays shareholders a monthly dividend of $0.21 per share, indicating a yield of over 5%.
Priced at 14.7 times forward earnings, Exchange Income stock continues to trade at a cheap valuation. Analysts expect the TSX stock to gain over 25% in the next 12 months.
Dream Industrial REIT
A company that offers you exposure to the real estate sector, Dream Industrial REIT (TSX: DIR.UN) pays shareholders a monthly dividend of $0.058 per share, indicating a yield of 4.9%.
The real estate investment trust owns, manages, and operates a portfolio of 321 industrial assets totaling 70.4 million square feet of gross leasable area across Canada, Europe, and the U.S.
In Q1 of 2023, Dream Industrial increased:
- funds from operations by 13.3% year over year to $0.25 per unit,
- net operating income by 13% to $74.8 million, and
- net rental income by 24.7% to $81.5 million.
It ended the March quarter with total assets of $7.8 billion, up from $7.3 billion in December 2022. With an occupancy rate of 98.6%, Dream Industrial REIT is armed with an investment-grade balance sheet and high-quality portfolio. The stock also trades at a discount of 21.4% to consensus price target estimates.
