2 Monthly Dividend-Paying Stocks for Passive Income

While dividend-payout frequency ranks lower than yield and sustainability when it comes to the factors that should influence your investment decision, it’s worth considering.

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One problem most dividend investors face is aligning various dividend payment frequencies. Since most companies pay quarterly dividends, it’s possible for a dividend investor to earn a substantial income in some months and limited or even no income in others. If they are not careful with their spending and managing the dividend-based, passive-income influx, this can become quite inconvenient.

This is where monthly dividend-paying stocks might be a better fit. They provide consistent monthly income, which is easier to incorporate with the primary income or to be used directly for routine expenses. There are plenty of Canadian stocks that pay monthly dividends, but only a few of them check other good investment boxes.

A pizza company

Pizza Pizza Royalty (TSX:PZA) is a Toronto-based, small-cap company that operates primarily in Ontario, where it has over 500 restaurants, though it’s growing its presence, not just in other provinces but other countries, too (Mexico).

It owns two brands: Pizza Pizza and Pizza 73. It collectively has 750 restaurants. The company has established a solid presence in Alberta with the Pizza 73 brand, where it has 94 restaurants.

It’s an old name, going back to 1967, and has spent decades growing its reach and clientele. It is also an established dividend stock, with just one blemish on its history — the dividend cut of 2020.

However, considering how COVID impacted restaurant businesses worldwide, the dividend cut was relatively gentle, and the company has already grown its payouts beyond its pre-pandemic levels.

This dividend growth is one of the reasons behind the attractive 6.5% yield this monthly dividend payer is offering right now. The payout ratio is not heavy per se, but it has managed to remain below 100% for nine out of the past 10 years.


Monthly dividends are common among Canadian real estate investment trusts, or REITs, and one of the good picks from this market segment is SmartCentres REIT (TSX:SRU.UN).

It used to be a solid retail REIT, thanks to its sizable property portfolio and an amazing tenant portfolio, including Walmart, which occupies 114 out of its 191 properties. However, the REIT is now growing its portfolio of mixed-use assets as well.

It’s one of the largest REITs in Canada by portfolio value and market capitalization. It’s also quite stable, which is reflected in its performance as well. The capital-appreciation potential is minimal, but it does offer decent capital-preservation potential.

It has a strong dividend history and offers an amazing yield — 7.9%. The REIT was raising its dividends quite consistently up until the last quarter of 2019, and since then, it hasn’t raised its payouts, though it didn’t slash them either. This is a testament to the sustainability of its dividends.

  • We just revealed five stocks as “best buys” this month … join Stock Advisor Canada to find out if SmartCentres REIT made the list!

Foolish takeaway

Based on their current yields, the two dividend payers can offer investors a monthly income of about $120, with $10,000 invested in each. That’s a decent sum and can help investors with at least some of their expenses.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends SmartCentres Real Estate Investment Trust and Walmart. The Motley Fool has a disclosure policy.

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