The Canadian stock market has remained highly volatile in the post-pandemic era. After declining by 8.7% in 2022, the TSX Composite benchmark staged a recovery of 8.1% in 2023 amid investors’ rising hopes that the central banks in the United States and Canada will soon start easing their monetary stance.
Although inflation in both countries has started easing of late, the possibility that central banks will keep interest rates elevated for some more time can’t be ruled out completely. But if central banks don’t start easing interest rates in the short term, we may see another temporary stock market pullback. This is one of the key reasons why you may want to consider incorporating some quality dividend stocks into your portfolio in 2024 that can help you earn monthly passive income irrespective of short-term market ups and downs. Let’s look at two top Canadian monthly dividend stocks you can buy in 2024.
Sienna Senior Living stock
Sienna Senior Living (TSX:SIA) provides various living options to seniors in Canada, including long-term care and independent and assisted living. The Markham-headquartered firm currently has a market cap of $841.5 million, as its stock trades at $11.56 per share after rallying by more than 12% in the last three months. At this market price, this monthly-paying dividend stock offers a very attractive annualized dividend yield of 8.1%.
After COVID-19-related operational challenges affected its operations in the previous three years, the company’s financial growth showcased significant improvements in 2023. Sienna’s same-property net operating income rose 7% YoY (year over year) to $37.5 million in the third quarter of 2023, with a 6.1% rise in the long-term-care and nearly 8% increase in the retirement segment. The company’s long-term-care occupancy also expanded to 19.4% during the quarter, reflecting a YoY improvement of 250 basis points.
In September last year, Sienna revealed its intentions to acquire the remaining 60% interest in Nicola Lodge, a 256-bed, British Columbia-based long-term-care community. Besides the ongoing improvement in Sienna’s organic growth, such quality acquisitions can enhance its future growth potential further, making this monthly dividend stock even more attractive to buy now.
Freehold Royalties stock
Freehold Royalties (TSX:FRU) could be another strong Canadian monthly dividend stock to consider in 2024. This Calgary-based firm primarily focuses on actively acquiring and managing energy sector-focused royalties in Canada and the United States. It currently has a market cap of $2.1 billion as FRU stock trades at $13.94 per share after witnessing a 7.6% value erosion in the last year. The company distributes its dividend payouts every month and currently offers an annualized dividend yield of 7.7%.
In the third quarter of 2023, Freehold’s U.S. production reached a record of 5,427 barrels of oil equivalent per day (boe/d), reflecting 12% sequential organic growth. The company’s overall production stood at 14,605 boe/d, with a notable 17% YoY jump in U.S. production. Despite a slight decrease in Canadian production due to wildfires, Freehold demonstrated robust financial performance with $65.3 million in funds from operations and returned $41 million in dividends to shareholders.
Moreover, Freehold’s expanding U.S. portfolio and strategic North American operations make it a trustworthy monthly dividend stock to hold for the long term.
