The equity markets have been volatile this year, as analysts are predicting an economic slowdown due to the impact of conservative monetary policies. Amid the volatile environment, investors can buy quality monthly-paying dividend stocks to earn a stable passive income and strengthen their portfolios.
If you invest around $10,000 in each of the following three TSX stocks, you can earn over $160 monthly through dividends.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | INVESTMENT | DIVIDEND | TOTAL PAYOUT | FREQUENCY |
| PZA | $14.90 | 671 | $9,997.9 | $0.0775 | $52.025 | Monthly |
| WCP | $8.81 | 1135 | $9,999.35 | $0.0608 | $69.008 | Monthly |
| NPI | $24.89 | 401 | $9,980.90 | $0.10 | $40.01 | Monthly |
| Total | $161.11 |
Pizza Pizza Royalty
Pizza Pizza Royalty (TSX: PZA) would be my first pick due to its stable cash flows and high dividend yield. It operates Pizza Pizza and Pizza 73 brand restaurants through franchisees and collects royalties from them based on their sales. So, its financials are less susceptible to inflation. Further, the company has witnessed a solid same-store sales growth of 9.8% in the first three quarters of 2023, thus driving its royalty pool income by 11.6%.
Amid its solid financials, the Toronto-based restaurant company has raised its monthly dividend three times this year, with its forward yield at 6.24%. Meanwhile, the company is continuing with the construction of new restaurants and the renovation of old restaurants, which could boost its sales in the coming quarters. It trades at an attractive valuation, with its NTM (next 12-month) price to sales at 0.8, making it an attractive buy.
Whitecap Resources
Whitecap Resources (TSX: WCP) has been under pressure over the last four months amid a steep correction in oil prices. It has lost 26% of its stock value compared to its September highs. The selloff has dragged its valuation down to attractive levels, with its NTM price-to-earnings multiple standing at 4.9.
Meanwhile, the International Energy Agency is bullish on oil and expects global oil consumption in 2024 to be at 1.1 million barrels per day. The median price target for Brent crude by five top U.S. banks is US$85/barrel, a 10.9% increase from its current price. So, rising oil prices could benefit Whitecap Resources.
Meanwhile, the company expects its 2024 average production to be 165,000-170,000 barrels of oil equivalent per day, with the midpoint representing a 5% growth from its previous year. Further, the company plans to invest $900 million to $1.1 billion this year. Amid its increased production and disciplined capital budget, WCP expects to generate $1.8 billion in fund flows and $700 million in free cash flows after its capital expenditure. The company has also stress-tested its budget with West Texas Intermediate crude at US$50/barrel, ensuring its dividend and maintenance capital’s sustainability.
So, I believe Whitecap Resources’s future dividend payouts will be safe. Meanwhile, it currently pays a monthly dividend of $0.0608/share, with its forward yield at 8.28%.
Northland Power
Northland Power (TSX: NPI) focuses on developing and operating clean and green power infrastructure assets, with a total production capacity of 3.4 gigawatts. It sells most of the power through long-term power-purchase agreements, with an average life of these contracts at around 14 years. So, the company is able to generate stable and predictable cash flows, allowing it to reward its shareholders through healthy dividends. It pays a monthly dividend of $0.10/share, with a forward yield of 4.82%.
Meanwhile, the Toronto-based energy company has a solid project pipeline, with a total production capacity of 13 gigawatts across multiple markets and technologies. Of these projects, the company hopes to put around 2.8 gigawatts of projects into service by 2027, thus increasing its total capacity to six gigawatts. Amid these growth initiatives, the company expects its adjusted earnings before interest, tax, depreciation, and amortization to grow at a compound annual growth rate of 7-10% through 2027. So, I believe the company’s future dividend payouts will be safe, thus making it an excellent buy.
