It does not take an economist to understand that the high inflationary environment has had a toll on the economy and people in general. Due to massively high inflation, central banks in the U.S. and Canada have been forced to enact a series of rapid interest rate hikes for over 18 months. The goal is to use higher borrowing costs to reduce spending, slow economic activity, and control inflation.
While the measure might cool inflation down eventually, it is a double-edged sword. With the price of living increasing and borrowing becoming more expensive, people need multiple income streams to make ends meet or meet their financial goals.
There are several ways to create more income streams. For a stock market investor, dividend investing can be one of the best ways to earn some extra income for doing next to nothing.
In this article, I will highlight two of the top Canadian dividend-paying stocks you can buy and hold in your self-directed portfolio for monthly passive income.
Exchange Income
Exchange Income (TSX:EIF) is a $2.17 billion market capitalization diversified acquisition-oriented corporation. The company focuses on two primary sectors: aviation services and aerospace, and equipment and manufacturing.
By investing in well-established companies with strong cash flows in niche operating markets, it drives its own success. The more businesses it acquires, the more it can grow shareholder value.
As of this writing, Exchange Income stock trades for $46.73 per share, paying out $0.21 per share at a monthly schedule. Boasting a 2.39% dividend yield, it is an attractive monthly dividend stock. With the acquisition of DryAir Manufacturing Corp. last month, it has secured yet another business to add to its cash flows and keep sustaining its monthly payouts.
Choice Properties REIT
Choice Properties REIT (TSX:CHP.UN) is a real estate investment trust (REIT) with a $4.19 billion market capitalization. The trust invests in, manages, and develops retail and commercial properties throughout the country.
The focus of this REIT is primarily on shopping centers that it can lease to supermarkets and standalone supermarkets. With Loblaw as one of its key tenants across most of its locations, Choice Properties REIT generates substantial cash flows to support its monthly payouts.
As of this writing, Choice Properties REIT trades for $12.79 per share, paying $0.0625 per month per share. Boasting a 5.86% annualized yield, it is also an attractive dividend stock for a monthly income portfolio.
Besides Loblaw, it boasts the likes of Walmart, Lowe’s, Amazon, Dollarama, and Canadian Tire among its tenants. Its solid tenant base is one of the key reasons long-term investors can continue relying on Choice Properties REIT for monthly dividend income.
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Foolish takeaway
A monthly dividend income stream is not just good for helping you out during tough economic conditions with some extra income. When things are better, you can remain invested in these dividend stocks. By reinvesting the dividends to add more shares of dividend stocks to your portfolio, you can use the power of compounding to accelerate your wealth growth.
Through compounding, the value of your self-directed investment portfolio can grow drastically. With a disciplined approach to dividend investing, you can get closer and closer to achieving your long-term financial goals as well. To this end, Exchange Income stock and Choice Properties REIT can be excellent additions to your portfolio.
