Earlier this month, Statistics Canada announced that Canada’s inflation in January stood at 2.9%, lower than economists’ prediction of 3.3%. The decline was primarily due to lower gas prices, which fell 4%. However, core inflation, excluding gasoline, stood at 3.2%. With higher inflation lowering your purchasing power, investors can buy quality monthly paying dividend stocks to earn a stable passive income to reduce the impact.
Investors can invest around $12,500 in each of the following three monthly paying dividend stocks to earn over $200 monthly.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | INVESTMENT | DIVIDEND | TOTAL PAYOUT | FREQUENCY |
| PZA | $14.30 | 874 | $12,498 | $0.0775 | $67.70 | Monthly |
| NPI | $23.00 | 543 | $12,489 | $0.10 | $54.30 | Monthly |
| WCP | $9.42 | 1326 | $12,491 | $0.0608 | $80.60 | Monthly |
| Total | $202.70 |
Pizza Pizza Royalty
Pizza Pizza Royalty (TSX: PZA) would be one of the top monthly paying dividend stocks to have in your portfolio, given its asset-light business model and high dividend yield. The company has adopted a highly franchised business model. It collects royalties from its franchisees based on their sales. So, its financials are less susceptible to inflation. Meanwhile, the company has posted solid same-store sales growth of 9.8% in the first three quarters and increased its restaurant network by 21 units, driving its financial performance.
Given its assets-light business model, the Toronto-based restaurant company has adopted a policy to distribute all available cash to its investors. However, its payout ratio stands at 97%, as it intends to smoothen its dividend payouts despite seasonal variations. Currently, PZA pays a monthly dividend of $0.0775/share, with its forward yield at 6.49%.
Further, PZA expanded its restaurant network by adding 45 new restaurants to its royalty pool and removed 14 restaurants that closed their operations. Besides, it continues to construct new restaurants, which could boost its financials in the coming quarters. Also, its valuation looks reasonable with its NTM (next 12 months) price-to-earnings multiple at 15.7.
Northland Power
Northland Power (TSX: NPI) produces electricity from clean renewable resources. It operates well-diversified power-producing facilities with a total power-producing capacity of 3.4 gigawatts. With the power producer selling the power produced from its facilities through long-term contracts, its financials are predictable. Despite the challenging environment, the company’s adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) increased by 10% in the recently reported fourth-quarter earnings.
Meanwhile, the Toronto-based company is expanding its asset base with 13-gigawatt developmental projects across multiple markets and technologies. Northland is confident of increasing its power-production capacity to 6 gigawatts by 2027. Amid these growth initiatives, the company expects its adjusted EBITDA to grow at a CAGR (compound annual growth rate) of 7 to 10% through 2027. So, I believe NPI stock’s future dividend payouts are safe. With a monthly dividend of $0.10/share, the stock offers a high yield of 5.21%. Besides, its valuation also looks attractive, with its NTM price-to-earnings multiple at 17.3.
Whitecap Resources
Despite the uncertain outlook, oil prices have moved north this year, with Brent Crude Oil rising by over 8%. The ongoing geopolitical tensions, falling inventories, and fear of OPEC (Organization of the Petroleum Exporting Countries) and its allies continuing their production cuts beyond the first quarter have increased oil prices. Higher oil prices could benefit oil-producing companies, including Whitecap Resources (TSX: WCP).
Besides, the Calgary-based company expects its average production in 2024 to be 165,000–170,000 barrels of oil equivalent per day. The midpoint of the guidance represents a 6.7% increase from the previous year. Given its increased production and favourable oil prices, Whitecap expects to generate fund flows of $1.6 billion this year. After accounting for capital expenditure, the oil producer hopes to generate $600 million of free fund flows, more than sufficient to cover its annual dividend obligation. So, I believe WCP stock’s future dividend payouts are safe.
Meanwhile, the energy company currently pays a monthly dividend of $0.0608/share, with its forward yield currently at 7.77%. Considering all these factors, I believe Whitecap Resources would be an excellent buy for income-seeking investors.
