Amid the growing equity market volatility, investors could start accumulating monthly-paying dividend stocks to earn a stable passive income irrespective of the broader market performance. Also, this passive income will help investors mitigate some of the impacts of price rises in this inflationary environment.
By investing around $5,000 in each of the three monthly-paying dividend stocks, an investor can earn over $100 per month or $1,200 per annum. Meanwhile, let’s look at the three TSX stocks in detail.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | INVESTMENT | DIVIDEND | TOTAL PAYOUT | FREQUENCY |
| NWH | $6.32 | 791 | $4999.12 | $0.06667 | $52.7 | Monthly |
| PZA | $14.75 | 338 | $4985.5 | $0.075 | $25.4 | Monthly |
| EXE | $6.49 | 770 | $4997.3 | $0.04 | $30.8 | Monthly |
| Total | $108.9 |
NorthWest Healthcare Properties REIT
Facing rising interest rates and a temporary increase in its leverage, NorthWest Healthcare Properties REIT (TSX:NWH.UN) has been under pressure over the last 12 months. It has lost over half its stock value compared to its 52-week high. Amid the steep correction, the company’s price-to-book multiple has declined to 0.7 while its forward dividend yield has increased to 12.65%.
Earlier this month, the REIT (real estate investment trust) posted its third-quarter performance, highlighting topline growth of 12.5%. However, its adjusted funds from operations per unit declined by 35% to $0.13. Lower management fees and increased interest expenses due to higher floating rates weighed on the company’s adjusted funds from operations.
Meanwhile, the company’s occupancy rate remained healthier at 96%. Besides, its long-term lease agreements, with a weighted average lease expiry of 13.5 years, government-backed tenants, and inflation-indexed rent, stabilize its cash flows. The REIT has also undertaken deleveraging initiatives, such as selling non-core assets and lowering its stake in a few joint ventures. Bolstered by the improving financial position, NWH.UN stock could continue to reward its shareholders by paying dividends at a healthier rate.
Pizza Pizza Royalties
Another top monthly-paying dividend stock to buy right now is Pizza Pizza Royalties (TSX: PZA), which operates Pizza Pizza and Pizza 73 brand restaurants through franchisees. The company collects royalties from its franchisees based on their sales. So, rising expenses due to wage and commodity inflation will not hurt its financials. Meanwhile, the company’s royalty income increased by 10.9% buoyed by same-store sales growth of 9.4% and the net addition of 16 new restaurants over the last 12 months. Its adjusted EPS (earnings per share) also grew 11.8% to $0.247.
Supported by its strong financials, the restaurant company has raised its monthly dividends seven times since April 2020. With a monthly dividend of $0.075/share, its forward yield translates to 6.1%. Notably, the company has planned to increase its restaurant count by 3–4% this year while continuing its restaurant renovation program. Along with these growth initiatives and solid same-store sales, the company can continue paying dividends at a healthier rate.
Extendicare
My final pick would be Extendicare (TSX: EXE), which offers care and services to Canadian senior citizens. During the second quarter, the company witnessed volume growth in its home healthcare segment while its long-term care (LTC) occupancy rate increased by 4.7% to 97.2%. Amid the improvement in its operating metrics, its revenue increased by 3.7%. Despite the topline growth, its adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) fell 18.2%. However, removing the impact of one-time items, the company’s adjusted EBITDA increased by $1.2 million.
Meanwhile, the demand for Extendicare’s service could rise in the coming years driven by growth in the aging population. Besides, the company recently completed its previously announced transaction with Revera, adding 56 LTC homes and around 7,000 beds. It has also started the construction of a 256-bed LTC home in Peterborough, Ontario, to replace its existing 172-bed home. So, given the favourable environment and growth initiatives, I believe the company’s dividends are safe. EXE currently offers a monthly dividend of $0.04/share, with its forward yield at 7.4%.
