This 8% Dividend Stock Pays Cash Every Month

Earn monthly cash of $154 with this 8% dividend stock.

| More on:
Hour glass and calendar concept for time slipping away for important appointment date, schedule and deadline

Image source: Getty Images

Dividend-paying stocks are excellent investments for investors seeking passive income. Thankfully, the TSX has several fundamentally strong stocks that have been consistently paying and increasing dividends for decades, making them dependable investments to start a passive income stream. 

While the Canadian stock market has several top-quality income stocks, I’ll focus on a company that offers monthly payouts. This Canadian stock offers a lucrative dividend yield of 8% near the current levels.

 A top monthly dividend stock

Speaking of top monthly dividend stocks, SmartCentres Real Estate Investment Trust (TSX:SRU.UN) stands out for the durability of its payouts and attractive yield. This real estate investment trust (REIT) distributes most of its earnings. Moreover, SmartCentres owns a high-quality real estate portfolio that drives its net income and funds from operations (FFO), supporting its monthly payouts. 

SmartCentres currently pays a monthly dividend of $0.154 per share, translating into a yield of over 8% based on its closing price of $22.92 on May 22. 

Why is SmartCentres REIT an attractive dividend stock? 

SmartCentres REIT stands out as an attractive dividend bet due to its compelling yield and the reliability of its monthly distributions. The firm’s monthly distributions are well covered by a resilient real estate portfolio consistently generating solid same-property net operating income (NOI) and FFO. 

It’s worth noting that SmartCentres had ownership interests in 193 properties as of March 31, 2024, including 155 retail properties. The higher concentration of retail properties acts as the anchor to its cash flows and supports its occupancy rate. This, in turn, drives its payouts. 

Moreover, strong leasing interest for both existing and new builds indicates that the company’s occupancy rate will likely improve from current levels. Furthermore, there’s growing demand for the company’s portfolio, which augurs well for growth as it indicates positive market dynamics.

SmartCentres has strong tenant retention rates. Moreover, the REIT has a top-quality tenant base, including leading retailers like Walmart. Further, it benefits from a high cash collection rate. In addition, its lease extensions or renewals come with strong rental increases, which will boost cash flows.

The REIT’s retail properties add stability and support its cash flows. Meanwhile, the development of mixed-use properties opens up new avenues of growth. With a solid pipeline of mixed-use projects and an underutilized land bank, the firm is well-positioned to consistently generate resilient income and grow FFO, which will enable it to enhance its shareholders’ value through regular monthly payouts. 

Additionally, the REIT’s 81% of debt is fixed-rate. This higher mix of fixed-rate debt provides insulation against the prolonged high-interest rate environment. Further, it is deleveraging its balance sheet, which augurs well for future growth.

Bottom line 

SmartCentres’ top-quality real estate portfolio, strong demand, higher leasing and renewal activity, and solid occupancy and retention rate position it well to generate resilient income and FFO. In summary, SmartCentres is well-positioned to consistently enhance its shareholders’ returns through monthly cash dividends.

The table below shows that by purchasing 1,000 shares of SmartCentres REIT, investors can earn $154 in monthly cash. 

CompanyRecent PriceNumber of SharesDividendTotal PayoutFrequency
SmartCentres REIT$22.921,000$0.154$154Monthly
Price as of 05/22/2024

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.

Fool contributor Sneha Nahata has no position in any of the stocks mentioned. The Motley Fool recommends SmartCentres Real Estate Investment Trust. The Motley Fool has a disclosure policy.

More on Dividend Stocks

Dividend Stocks

10 Years From Now, You’ll Be Glad You Bought These Magnificent TSX Dividend Stocks

The TSX is lucrative to buy these magnificent dividend stocks in bulk and be proud of this decision 10 years…

Read more »

calculate and analyze stock
Dividend Stocks

4 Fabulous Dividend Stocks to Buy in July

Are you looking for long-term income? These four dividend stocks should not only provide you with value in July but…

Read more »

financial freedom sign
Dividend Stocks

5 Steps to Financial Freedom for Canadian Millennials

Follow these steps and nothing can stop Canadian millennials from achieving their early retirement dreams.

Read more »

Investor wonders if it's safe to buy stocks now
Dividend Stocks

We’re Only Getting Older: A Top TSX Stock That Benefits From an Aging Population

For a bet on the aging population, consider this small-cap stock with growth potential.

Read more »

Growing plant shoots on coins
Dividend Stocks

Yield Today, Growth Tomorrow: 3 Stocks to Keep Building Your Wealth

For investors seeking yield today and growth tomorrow, these top Canadian dividend stocks are certainly worth considering right now.

Read more »

Payday ringed on a calendar
Dividend Stocks

This 10.72% Dividend Stock Pays Cash Every Month

This dividend stock remains a consistent, defensive dividend producer that will give up over 10% in income each and every…

Read more »

Blocks conceptualizing Canada's Tax Free Savings Account
Dividend Stocks

TFSA Investors: 2 Standout Domestic Stocks With 7% Yields

These top dividend-growth stocks look oversold.

Read more »

Dividend Stocks

2 Dividend Stocks to Double Up on Right Now

Despite their recent declines, the long-term growth outlook of these two top dividend stocks remains strong, which could help their…

Read more »