The inflationary environment is creating deeper holes in consumer pockets. Meanwhile, consumers can minimize the impact by having a secondary or passive income. One of the most convenient ways to earn a passive income is by investing in monthly paying dividend stocks. However, investors have to be cautious while choosing stocks. The following two top monthly paying dividend stocks can boost your passive income. Consider that, investing around $17,500 in each of these two stocks can generate a passive income of over $200 monthly.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | INVESTMENT | DIVIDEND | TOTAL PAYOUT | FREQUENCY |
| PZA | $13.95 | 1254 | $17493 | $0.0775 | $97.2 | Monthly |
| WCP | $9.76 | 1793 | $17500 | $0.0608 | $109 | Monthly |
| Total | $206.2 |
Pizza Pizza Royalty
Pizza Pizza Royalty (TSX: PZA) would be a top monthly paying dividend stock to buy right now due to its stable cash flows and high yield. Last week, the company reported a solid third-quarter performance, with its royalty pool sales increasing by 9%. Same-store sales growth of 7% and net addition of 16 restaurants to its royalty pool drove its royalty pool sales. Further, its royalty pool income grew by 9.2% to $10.4 million, while its adjusted EPS (earnings per share) increased by 10.4%.
Boosted by its solid financials, the restaurant company raised its monthly dividend by 3.3% to $0.0775/share, the third increase this year. Meanwhile, its payout ratio is at 93%, while its forward yield is 6.69%. The company has adopted a policy to distribute all available cash after allowing for reasonable reserves, thus maximizing shareholders’ returns. The reserves help in smoothening out its monthly payouts as seasonal variations are inherent to the restaurant industry.
Meanwhile, the pizza chain’s strong value proposition and restaurant expansion and renovation plans could continue to boost its financials in the coming quarters. PZA trades at 15.3 times analysts’ earnings projections for the next four quarters, making it an attractive buy.
Whitecap Resources
Second on my list would be Whitecap Resources (TSX: WCP), an oil and natural gas production company. Oil prices have declined over the last few days amid concerns over waning demand in the United States and China. Meanwhile, analysts continue to be bullish on oil amid easing refinery maintenance and improving investor sentiment. Besides, the possibility of interventions by OPEC (Organization of the Petroleum Exporting Countries) and its allies to stabilize oil prices and supply risks amid the escalation of the conflict in the Middle East could boost oil prices, thus benefiting oil-producing companies, such as Whitecap Resources.
Meanwhile, the company has plans to invest around $1–1.2 billion of capital in 2024 to strengthen its asset base. Supported by these investments and solid underlying business, management expects to produce 162,000–168,000 barrels of oil equivalent per day in 2024. The midpoint of the company’s production guidance represents a 5% increase from the previous year. Further, management is also optimistic of raising its production to 200,000 BOE/D by 2027 at an annualized growth rate of 5%. So, given its growth prospects, I believe the oil producer’s future payouts to be safe.
Whitecap Resources currently pays a monthly dividend of $0.0608/share, with its forward yield at 7.48%. Also, its NTM price-to-earnings multiple stands at 5.4. So, considering its solid underlying business, healthy growth prospects, high dividend yield, and cheaper valuation, Whitecap Resources is an excellent buy for income-seeking investors.
