Yesterday, Statistics Canada announced that Canada’s inflation fell to 2.8% in June, the lowest in the previous 27 months. The decline in gasoline and telecommunications services prices eased inflationary pressure. However, food and mortgage expenses continue to rise, with food prices increasing by 9% compared to the previous year’s month. Food prices have almost increased by 20% in the last two years.
With rising prices creating a deeper hole in your pocket, investors should look to earn a stable and reliable passive income to lower the impact of inflation. Meanwhile, investing in high-yielding dividend stocks is one of the convenient ways to make a steady passive income. Here are three top monthly-paying dividend stocks that could boost your passive income.
Pizza Pizza Royalty
Pizza Pizza Royalty (TSX:PZA) would be an excellent dividend stock to have in your portfolio due to its stable cash flows and high dividend yield. The company operates a franchised restaurant business, collecting royalty from its franchisees based on their sales. So, rising prices and wage inflation will not impact its financials. Meanwhile, increasing menu prices to compensate for rising expenses in this inflationary environment could boost its royalty income.
Amid its solid financials, PZA’s management has raised dividends seven times since April 2020. Currently, it offers a monthly dividend of $0.075/share, with its yield for the next four quarters standing at 5.98%. Additionally, the company has planned to increase its restaurant count by 3-4% this year. The company’s strong value messaging and promotional activities could continue to drive its same-store sales growth. So, I believe the company is well positioned to continue paying dividends at a healthier rate, making it an attractive buy.
NorthWest Healthcare Properties REIT
Second on my list is NorthWest Healthcare Properties REIT (TSX:NWH.UN), which pays a monthly dividend of $0.06667/share, with its forward yield at 11.85%. The real estate investment trust, which focuses on acquiring and managing healthcare properties, has been under pressure over the last few months amid weak quarterly performances. A temporary increase in its leverage and rising interest rates weighed on its financials.
Meanwhile, the company has taken several deleveraging initiatives, such as selling non-core assets and lowering its stake in the United States and United Kingdom joint ventures. These initiatives together can generate $550-$600 million, which the company will utilize to pay off high-interest-bearing loans. The company’s defensive healthcare portfolio, long-term lease agreements, and government-backed tenants provide stability to its financials, allowing it to pay dividends at a healthy rate.
Whitecap Resources
Oil prices have bounced back strongly over the last few weeks amid improving market conditions, with inflation in the United States slowing down to 3% in June. Oil prices have increased by over 15% from last month’s lows. Higher oil prices could benefit oil-producing companies, including Whitecap Resources (TSX:WCP).
In April, the company posted an impressive first-quarter performance, generating $448 million in fund flows. By removing capital expenditures of $254 million, the company had $194 million in free fund flows. Supported by the proceeds from the disposition and excess fund flows, the company lowered its net debt by around $400 million during the quarter to $1.47 billion. The company’s management has stated that it would return 75% of its free fund flows to shareholders upon lowering its debt to below $1.3 billion.
Meanwhile, the company has planned to make a capital investment of $900-$950 million this year, boosting its production. The company hopes to increase its output by 12% to around 160,000-162,000 barrels of oil equivalent per day this year. Higher production and favourable oil prices could support its financial growth. So, the company’s outlook looks healthy.
Meanwhile, Whitecap Resources pays a monthly dividend of $0.483/share, with its forward yield currently at 5.8%. Given its healthy growth prospects and solid cash flows, I believe the company’s payouts are safer.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | INVESTMENT | DIVIDEND | TOTAL PAYOUT (MONTHLY) | DIVIDEND FREQUENCY |
| PZA | $15.06 | 3,452 | $51,987 | $0.075 | $258.90 | Monthly |
| NWH | $6.75 | 7,703 | $51,995 | $0.06667 | $513.56 | Monthly |
| WCP | $9.99 | 5,205 | $51,997 | $0.0483 | $251.40 | Monthly |
| TOTAL | $155,980 | $1,023.86 |
Investors takeaway
If you invest around $52,000 in each of the following three monthly-paying dividend stocks, you can earn over $1,000 every month. You can also benefit from the capital appreciation.
This example only provides a fair idea to investors about earning a monthly passive income of $1,000. However, investors should not invest large amounts in just a couple of stocks. Instead, they can diversify to lower their risks.
