Adding dividend-paying stocks to your portfolio can be a source of income that can span years. There’s no shortage of dividend-paying stocks on the market, but only a few can attest to being able to cut you a cheque each month.
Here’s a look at two superb dividend stocks that cut you a cheque each month.
Generate an income and get some diversification
Exchange Income Corporation (TSX:EIF) is a great monthly dividend stock that should be on the radar of all investors. Exchange is acquisition-focused. The company currently owns over a dozen subsidiary companies that broadly fall under the aviation and manufacturing segments.
A unique aspect of those subsidiary companies is that they generate free cash for Exchange. They also cater to unique segments of the market. More specifically, they are segments of the market where there is a necessity and demand but limited, if any, competition.
Prime examples of these include providing passenger and cargo air service to Canada’s remote north. On the manufacturing side, an example would be constructing cell tower infrastructure.
The cash generated by those companies helps Exchange offer investors a very juicy monthly dividend. As of the time of writing, the yield works out to an impressive 5.5%.
To put that income into perspective, let’s consider an investor with $25,000 to drop in Exchange. That investor can look to generate a monthly income of just over $115. It’s also worth noting that Exchange has provided an annual uptick to that dividend 16 times across the past 19 years.
And that’s not all. The company has seen impressive growth over the years, fuelled by that aggressive stance on expansion. In the preceding decade, the stock has nearly doubled, but it’s a more recent snapshot that investors should take note of.
Year to date, Exchange is down over 14%. This makes it a great discounted investment if you’re looking for a stock that can cut you a cheque each month.
All the income, less of the risk
One of the most tried-and-tested ways to establish a monthly income stream is through a rental property. Unfortunately, sky-high interest rates are making that a harder option for many investors.
Fortunately, there is another option available thanks to RioCan Real Estate (TSX:REI.UN). RioCan is one of the largest REITs in Canada, with a sprawling portfolio of nearly 200 sites. Most of those sites are situated in and around Canada’s major metro areas.
The opportunity for would-be landlord investors comes in the form of RioCans mixed-use portfolio. Those properties comprise of residential towers sitting atop several floors of retail. The properties are also situated in high-traffic areas along transit lines, making them in-demand options to consider.
And more importantly, those units generate a revenue stream for RioCan, which in turn allows it to provide investors with a very tasty monthly distribution. As of the time of writing, the monthly payout carries a yield of 6%, making it one of the better-paying options on the market.
It also means that investors with $25,000 to invest in RioCan can expect a monthly income of just shy of $125. Would-be landlords should note that investment is considerably less than a downpayment, and doesn’t require tenants or property taxes.
If that’s not reason enough to consider letting RioCan cut you a cheque each month, then there’s something else to note.
Like much of the market in 2023, RioCan is currently trading at a 14% discount. This makes it an ideal time to buy a superb stock for long-term gains.
Will you let these stocks cut you a cheque each month?
All stocks, even the most diversified carry some risk. Fortunately, Exchange and RioCan offer some defensive appeal. Exchange operates a well-diversified network of subsidiaries that generate cash. And RioCan operates a growing portfolio of increasingly mixed-use properties.
Both offer monthly payouts and both have significant long-term appeal. In my opinion, one or both would do well as part of a larger, well-diversified portfolio.