A high inflationary environment has forced the Bank of Canada to rapidly increase interest rates in the last one-and-a-half years. These two factors have not only triggered a selloff in the Canadian stock market but also have badly affected the consumer spending environment.
In such difficult economic conditions, having a reliable source of passive income could be of great help. While there are many different ways to achieve that goal, investing your hard-earned savings in some quality monthly-paying dividend stocks could be one of the most reliable ways of generating extra cash each month.
In this article, I’ll highlight two top Canadian dividend stocks you can buy now to get monthly passive income.
Choice Properties REIT stock
As its name suggests, Choice Properties REIT (TSX: CHP.UN) is a Toronto-headquartered real estate investment trust (REIT) with a strong portfolio of high-quality commercial and residential properties. It currently has a market cap of $4.2 billion as its stock trades at $12.83 per share with about 13% year-to-date losses. Choice Properties distributes its dividend payouts every month and has an attractive 5.8% annualized dividend yield at the current market price.
The strength of Choice Properties’s diversified asset portfolio could be understood by observing its long-term financial growth trends. To give you an idea, its revenue grew positively by 52% to $1.3 billion in the five years between 2017 to 2022. Despite facing pandemic-related and other macroeconomic challenges in between, the REIT’s adjusted annual earnings rose 4% to $1.03 per share during these five years.
Moreover, Choice Properties REIT’s excellent retail and industrial tenant base, including big companies like Canadian Tire, Dollarama, Walmart, Lowe’s, and Amazon, makes its growth trajectory largely predictable. This is one of the key reasons long-term investors looking to get extra monthly cash can consider investing in this reliable Canadian dividend stock today, despite the ongoing macroeconomic uncertainties.
Exchange Income stock
Exchange Income (TSX: EIF) could be another high-quality, monthly-paying dividend stock to buy in Canada right now. It’s a Winnipeg-based, acquisition-oriented firm with a key focus on sectors like aerospace, aviation, and manufacturing.
After rallying by 44% in the previous two years combined, EIF stock currently trades with 14.3% year-to-date losses at $45.10 per share and has a $2.1 billion market capitalization. At this market price, it offers a 5.6% annualized dividend yield and distributes its dividends each month.
Although there are hardly any companies that have not seen the negative impact of the ongoing economic slowdown, Exchange Income’s financial performance in recent quarters still looks impressive. Notably, the company has reported strong double-digit revenue growth for the last nine consecutive quarters. Similarly, its bottom line has been growing positively for five quarters in a row, reflecting its ability to continue performing well even in adverse economic conditions.
In recent quarters, Exchange Income has increased its focus on investments in areas like essential air services, aerospace, aircraft sales and leasing, and environmental access solutions, which have the potential to improve its financial performance in the coming years. That’s why, besides its handsome dividends, you can expect its share prices to strengthen and yield healthy returns on your investments in the long run.
