Investing in Canadian dividend stocks could be a smart choice if you are looking for a steady source of passive income that can last for years and help you save money for your retirement planning. TSX dividend stocks can provide you with healthy cash flow and capital appreciation to compound your returns over the long run.
While most companies prefer to distribute their dividends on a quarterly basis, many stocks on the Toronto Stock Exchange reward their investors with monthly cash, which can offer more flexibility and convenience for investors who want to reinvest their dividends or use them for regular expenses. In this article, I’ll highlight two of such fundamentally strong monthly dividend stocks you can buy in Canada right now and hold as long as you want.
A diversified Canadian monthly dividend stock
Whether you’re investing in stocks to multiply your savings over time or generate extra monthly cash from dividends, you should always pay attention to a stock’s business fundamentals. A strong and diversified business model helps a stock generate consistent cash flows and reward its shareholders with regular dividends.
Keeping that in mind, Exchange Income (TSX: EIF) could be a great pick for your long-term portfolio. This Winnipeg-headquartered company currently has a market cap of $2.3 billion as its stock trades at $48.25 per share with 7% year-to-date gains. The company mainly focuses on making quality acquisitions in the manufacturing and aerospace and aviation services sectors. At the current market price, EIF stock offers an annualized dividend yield of 5.5% and distributes these dividend payouts every month.
In 2023, Exchange Income’s total revenue jumped 21.3% YoY (year over year) to an annual record $2.5 billion due mainly to a solid 39% jump in its manufacturing segment revenue from a year ago. Similarly, its adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) surged 22% YoY to $555.5 million, its highest level in the company’s history.
Despite the ongoing macroeconomic challenges, Exchange Income’s management remains focused on new acquisition opportunities, which can help it maintain strong financial growth trends and help its share prices of this monthly dividend stock climb further.
Allied Properties REIT stock
Allied Properties REIT (TSX: AP.UN) is another very attractive Canadian stock that rewards its investors with monthly cash. After rallying more than 15% in the December quarter, the shares of this Toronto-headquartered real estate investment trust (REIT) have gone down by 14.4% in 2024 so far to currently trade at $17.28 per share with a market cap of $2.2 billion. Allied offers a really impressive 10.4% annualized dividend yield at the current market price.
Last year, Allied’s adjusted revenue inched up by 8.6% YoY to $564 million as its rental income continues to grow positively. The company’s adjusted EBITDA for the year also rose 3.2% from a year ago to $416 million.
Earlier this month, Allied announced its intention to acquire a significant interest in 400 West Georgia in Vancouver and raise its stake in 19 Duncan in Toronto in a move that is likely to increase its gross leasable area and accelerate its financial growth trends. Moreover, the REIT’s continued focus on efficient operational management and strategic leasing activities brightens its long-term growth outlook, making this monthly-paying Canadian dividend stock look attractive to buy for passive income.
