Passive Income: How Much Should You Invest to Earn $1,000 Every Month?

Having a secondary or passive income is advantageous in this inflationary environment. Food prices have increased by over 20% in the last two years, creating deeper holes in consumers’ pockets. Meanwhile, investors can mitigate the impact of rising prices by earning a passive income through their investments in monthly-paying dividend stocks. Here are three top monthly-paying dividend stocks you can buy right now to boost your passive income.

NorthWest Healthcare Properties REIT

NorthWest Healthcare Properties REIT (TSX:NWH.UN) is under pressure this year, losing around 47% of its stock value compared to its 52-week high. Weak quarterly performances amid a temporary increase in its leverage and rising interest rates weighed on its stock price. Meanwhile, the company has taken several deleveraging initiatives, such as selling non-core assets and stakes in joint ventures. These initiatives could generate net proceeds of $550–$600 million, with which the company hopes to repay its higher interest-bearing interest rates.

Besides, the healthcare REIT (real estate investment trust) has presented strategic options to its board and formed a Strategic Review ‎Committee to assess the company’s next phase of development and growth. Meanwhile, the company enjoys a high occupancy rate and long-term lease agreements and government-backed tenants. So, I believe the company’s future payouts are safe. Meanwhile, the REIT currently offers a monthly dividend of $0.06667/share, translating its forward yield to 11.3%. So, despite the weakness, I believe NorthWest Healthcare would be an excellent addition to your dividend portfolio.

Chemtrade Logistics Income Fund

Chemtrade Logistics Income Fund (TSX: CHE.UN) provides chemicals and services to various industries, such as gasoline, metals, fine paper, and water treatment industries. Supported by strong selling prices across its product range, the company posted a solid first-quarter performance, with its revenue and adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) growing by 20.7% and 22.2%, respectively. Besides, the company also lowered its net debt-to-adjusted EBITDA ratio from 3.5 times in the previous year’s quarter to 2.2 times, which is encouraging in this high-interest rate environment.

Additionally, in June, the company’s management raised its 2023 adjusted EBITDA guidance by around $20 million to about $450 million amid favourable prices and strong operational execution. So, I believe the industrial chemical supplier is well-positioned to continue rewarding its shareholders by paying dividends at a healthier rate. It currently pays a monthly dividend of $0.05/share, translating its forward yield to 6.80%. Also, the company trades at an attractive NTM (next 21 months) price-to-sales multiple of 0.5, making it an attractive buy.

Extendicare

With a dividend yield of 6.54% and an NTM price-to-sales multiple of 0.5, Extendicare (TSX: EXE) would be another excellent dividend stock for income-seeking investors. The demand for its services could rise driven by the growing aging population. Last year, the company sold its retirement living operations to focus on its long-term care (LTC) and home healthcare businesses, which are less capital-intensive while offering higher margins.

It recently acquired a 15% stake in Revera’s portfolio of 25 LTC homes for $32.6 million in cash and an assumption of around $37.1 million of net debt. Besides, the long-term care provider is constructing a 256-bed LTC home to replace a 172-bed Class C home in Peterborough, Ontario. These growth initiatives and improving operating metrics could drive its financials in the coming years, thus making its future payouts safer.

Investors’ takeaway

If an investor invests around $50,000 in each of the above three dividend stocks, he can earn over $1,000 per month. However, investing a significant amount in just a couple of stocks is not advisable. Investors can utilize the above strategy to make suitable investment decisions to earn a stable monthly income.