Whether youâre planning for your early retirement or just want to make some extra money to improve your lifestyle, having a reliable source of monthly passive income can be of great help. Even though there are numerous strategies to reach that goal, investing in Canadian dividend stocks might be one of the most flexible methods to generate monthly passive income.
By allocating a portion of your portfolio to some high-quality, dividend-yielding stocks, you not only gain exposure to the potential appreciation of their stocksâ value but also can benefit from their recurring monthly dividend payments.
In this article, Iâll highlight a top dividend stock you can buy now and hold for the next 20 years or more to earn healthy monthly passive income in Canada.
A top Canadian monthly dividend stock to buy today
Considering its long-term business growth potential and healthy financial position, Sienna Senior Living (TSX: SIA) could be a great Canadian monthly dividend stock to buy today. Itâs a provider of seniorsâ living options, including independent living, assisted living, memory care, and long-term care, headquartered in Markham. The company has over half a century of experience in its business domain, and its total assets are currently valued at $1.7 billion.
In 2023, SIA stock has seen a 2.6% value erosion due to the stock market selloff to currently trade at $10.62 per share with a market cap of $777.2 million. At this market price, the stock offers a very attractive 8.8% annualized dividend yield and distributes these dividend payouts every month.
Healthy business growth trends
The ongoing growth trends in Siennaâs financials look healthy. After witnessing a 1% YoY (year-over-year) decline in its total revenue due to the pandemic-related operational challenges in 2020, its revenue growth has remained positive in 2021 and 2022.
In the first of 2023, its adjusted revenue jumped 12.3% YoY to $398 million, with a 13.3% improvement in its net operating income. On the balance sheet side, the company had liquidity of $276 million at the end of the second quarter of 2023, reflecting an improvement from a year ago, despite macroeconomic challenges.
Why this stock is worth holding for the next 20 years
When youâre picking a dividend stock to hold for a very long term, you must pay attention to its financial health and earnings stability besides looking at its dividend history and payout ratio. This way, you can filter out the companies that can cut or discontinue their dividends after facing even temporary economic challenges. At the same time, you should also ensure that the products or services of that company will remain in demand in the long run.
Speaking of strong long-term demand, the demand outlook for Sienna Senior Livingâs services remains impressive. According to the latest census data, the elderly population in the 85-plus age group is likely to triple in the next 25 years. This factor, along with the growing needs of seniors, could create a huge demand for seniorsâ living options that Sienna provides across Canada.
These positive aspects can help the share prices of this monthly paying Canadian dividend stock strongly appreciate in the next two decades, which, along with its monthly dividends, can help you get steady returns on investments for years to come.
