Finding that perfect mix of investments that can provide you with monthly passive income can be a challenging feat. Fortunately, the market gives us plenty of great monthly dividend stocks to consider that can help meet that goal.
Most dividend stocks pay out on a quarterly cadence, but few pay on a more friendly monthly schedule. This can be beneficial for those with long-term timelines looking to reinvest that income until needed.
It’s arguably more of a factor for those investors entering retirement who are looking to start drawing on that income. For those investors, a monthly distribution is more predictable in terms of income and easier to budget.
It’s both intriguing and easier than you might think. Here’s a look at two monthly passive-income dividend stocks to consider for your portfolio.
A well-diversified stock that pays a generous dividend
Let’s start with Exchange Income Corporation (TSX:EIF). Exchange is an acquisition-focused company that owns over a dozen subsidiary companies. Those subsidiaries are broadly grouped into two segments- aviation and manufacturing.
There are two key points that prospective investors need to consider. The first notable point is that those subsidiaries generate free cash for the company. This allows Exchange to invest in new acquisitions and to pay out a very generous dividend (more on that in a moment).
The second point has to do with the subsidiaries themselves. They all provide a necessary product or service whereby there is limited, if any, competition despite strong demand. This adds a defensive element to what is already a stellar, well-diversified pick.
By way of example, the aviation boasts subsidiaries that provide medevac as well as passenger and cargo service to Canada’s remote north. Turning to the manufacturing side, Exchange boasts subsidiaries that provide manufacturing services to niche areas such as cell tower fabrication.
Turning to dividends, Exchange offers a juicy monthly distribution. As of the time of writing, Exchange boasts a yield of 5.71%, making it one of the better-paying monthly dividends on the market.
Forget the crazy real estate market for a moment
Few could argue with the fact that real estate prices in Canada have gone completely crazy in recent years. With the average home price in major metro areas skyrocketing to $1 million, many first-time homebuyers and would-be landlords are priced out of the market.
Fortunately, that’s where the appeal of RioCan Real Estate (TSX:REI.UN) comes into play.
RioCan is one of the largest real estate investment trusts (REITs) in Canada. Historically, RioCan has been comprised mainly of commercial retail properties, but in recent years, that mix has changed.
Specifically, RioCan now has a greater number of mixed-use residential properties in its portfolio. The mixed-use properties comprise residential towers that sit atop several floors of retail.
That’s precisely where there’s a massive opportunity for investors right now.
Additionally, those properties are located around heavy-traffic transit corridors in Canada’s major metro markets. In other words, they are in areas where there’s both high demand for would-be renters and significant foot traffic for retail.
That’s not all. Just like a landlord who is collecting rent, RioCan offers investors a monthly distribution. As of the time of writing, that distribution works out to a juicy 5.99%.
This means that those who allocate $40,000 towards RioCan can expect a monthly income just shy of $2,400. Keep in mind that, in this case, the initial investment is much less than a typical downpayment, and the risk is spread across hundreds of units.
That fact alone makes RioCan a superb option for investors looking for a monthly passive-income stream from one or more dividend stocks.
Final thoughts
No stock, even the most defensive, is without some risk, and that includes both of the monthly passive-income dividend stocks mentioned above. That’s why diversifying is such a key element for investors. Fortunately, both RioCan and Exchange also provide some growing defensive appeal.
In my opinion, both Exchange and RioCan are great long-term options to add to any well-diversified portfolio.
Buy them, hold them, and watch your monthly passive income grow.
