How Much to Invest to Get $500 in Dividends Every Month

Last week, the Bureau of Labor Statistics announced that the United States’s consumer price index rose 3.1% in November, a decline from 3.2% in the previous month. Despite the indication of inflation cooling down, it is still higher than the Federal Bank’s guidance of 2%. With inflation eating into your income, you should earn a passive income to lower the impact of rising prices.

Monthly-paying dividend stocks are one of the excellent means to earn a stable passive income. You can earn around $500 monthly by investing $86,000 in stocks with an over 7% dividend yield. Meanwhile, if you invest around $28,000 in each of the following three stocks ($84,000 in total), you can earn over $500 monthly. Let’s look at these three stocks in detail.

Pizza Pizza Royalty

Given its highly franchised business model, Pizza Pizza Royalty (TSX: PZA) generates stable cash flows, irrespective of the market environment. It collects royalties from its franchisees based on their sales. So, rising commodity prices and wage inflation will not hurt its financials. Meanwhile, the company continues to post strong same-store sales and expand its restaurant network, driving its royalty income this year. Supported by these strong financials, the company has raised its dividends three times this year, with its forward yield at 6.47%.

Meanwhile, with the company focusing on launching innovative products, promotional activities, and renovating old restaurants, I expect the uptrend in its financials to continue. Besides, it is also expanding its footprint as the federal government eases restrictions on all commercial construction. These initiatives could boost its cash flows, thus allowing it to continue paying dividends at a healthier yield.

NorthWest Healthcare Properties REIT

Second on my list would be NorthWest Healthcare Properties REIT (TSX:NWH.UN), which owns and manages 229 healthcare properties with a gross leasable area of 18.2 million square feet spread across eight counties. Amid the rising interest rates, the company is focusing on strengthening its balance sheet through sales of non-core assets, reducing its monthly distributions, and extending its maturity profile.

NorthWest Healthcare has sold its stake in Australian Unity Healthcare Property Trust for $110 million and used the proceeds to repay its debt. Besides, the company has sold around $180 million of the identified $300 million non-core assets. Meanwhile, the REIT continues to deliver healthy financials, with its revenue growing by 5.1%. Its occupancy rate stood healthy at 96%. However, its AFFO (adjusted funds from operations) fell from $0.15 per unit to $0.13/unit.

I believe NWH’s future dividend payouts are safe given the improved financial position. It currently pays a monthly dividend of $0.03/share, with its forward yield at 7.53%.

Whitecap Resources

My final pick would be Whitecap Resources (TSX: WCP), which has witnessed substantial selling over the last few weeks amid softening oil prices. It has lost close to 30% compared to its September highs. The pullback has dragged its valuation down, with its NTM (next 12 months) price-to-sales and NTM price-to-earnings multiples at 1.5 and 5, respectively. It also pays a monthly dividend of $0.0608/share, with a forward dividend yield of 8.125%.

OPEC (Organization of the Petroleum Exporting Countries) and its allies have opted for voluntary production cuts of 2.2 million barrels per day in the first quarter of next year. Besides, the improving macro environment amid signs of easing inflation could boost economic activities, thus supporting oil prices. Meanwhile, WCP has planned to invest around $1 billion to $1.2 billion next year, strengthening its asset base. With these investments, management expects its 2024 production to be between 162,000 and 168,000 barrels of oil equivalent per day, representing an increase of 5% from its previous year. So, I believe the company’s future payouts will be safe.