These 2 TSX Dividend Machines Pay You Monthly

Here are two of the best monthly dividend stocks you can buy in Canada right now and hold for the long term.

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If you are looking for reliable passive income from your investments, you might want to consider adding some quality Canadian dividend stocks to your portfolio. Dividend stocks are companies that pay out a portion of their profits to shareholders regularly. While most companies reward their investors with dividends every quarter or every year, some dividend stocks go the extra mile and pay you monthly. Earning monthly dividends can help you cover your additional living expenses or reinvest your dividends more frequently to get high returns on your investments over the long term.

In this article, I’ll talk about two of the best TSX dividend stocks that pay you monthly and have strong growth prospects to support their dividend payouts.

Whitecap Resources stock

Whitecap Resources (TSX:WCP) is the first stock you can consider buying right now for monthly dividend income. It’s a Calgary-headquartered company that primarily focuses on acquiring and holding interest in oil- and gas-related assets. It currently has a market cap of $5.7 billion as its stock trades at $9.55 per share with about 8% year-to-date gains against a 3.9% increase in the TSX Composite benchmark so far this year.

WCP pays a monthly dividend of $0.0608 per share, which translates to a very attractive annualized yield of 7.6% at the current stock price. In the five years from 2018 to 2023, its annual dividend per share has gone significantly up by around 132%, reflecting the company’s commitment to reward its shareholders.

After delivering an outstanding 325% revenue growth in the previous two years combined, Whitecap’s revenue fell 17.6% YoY (year over year) in 2023 to $3.2 billion due partly to weaker commodity prices. Still, it crushed Street analysts’ expectations of $1.7 billion by a huge margin. With this, the company posted adjusted annual earnings of $1.46 per share, which was stronger than analysts’ estimates of $1.32 per share.

Last month, Whitecap also raised its 2024 average production outlook range to 165,000-170,000 barrels of oil equivalent per day, with expected positive contribution from its recent acquisitions, reflecting 5.4% to 8.6% YoY growth. Higher production and recovering oil prices should help WCP strengthen its financial base, which can drive its share prices higher.

RioCan stock

Another dividend stock you can consider now to earn reliable passive income is RioCan REIT (TSX:REI.UN). RioCan is one of the largest real estate investment trusts (REITs) in Canada, with a large portfolio of retail sector-focused, mixed-use properties. It currently has a market cap of $5.4 billion as its stock trades at $18.14 per share with a minor 2.6% year-to-date decline. RioCan distributes its dividend payouts every month and offers an attractive annualized dividend yield of 6.1% at the current market price.

In 2023, RioCan’s adjusted annual funds from operations (FFO) grew positively by 3.5% YoY to $1.77 per share with the help of continued demand for quality retail spaces across Canada. The REIT expects its 2024 FFO to be between $1.79 and $1.82 per share, reflecting further growth.

Moreover, RioCan’s strong developmental project pipeline, robust balance sheet, and access to low-cost debt brighten its long-term growth outlook, making it a top monthly dividend stock to buy now and hold for years.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

The Motley Fool recommends Whitecap Resources. The Motley Fool has a disclosure policy. Fool contributor Jitendra Parashar has no position in any of the stocks mentioned.

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