The TSX has several fundamentally strong companies that consistently pay and increase their dividends. These dividend-paying stocks are reliable investment options for earning steady passive income.
For example, investors could consider shares like Fortis (TSX: FTS) and Enbridge (TSX: ENB). These companies have been uninterruptedly paying and increasing their dividends for decades. Moreover, they have well-protected payouts, a growing earnings base, and visibility over their future dividend payments.
While Fortis and Enbridge are dependable passive income stocks, they offer quarterly payouts. However, here, I’ll focus on two Canadian companies that pay dividends every 30 days or provide monthly payouts.
With this backdrop, here are two monthly income masters.
SmartCentres Real Estate Investment Trust
Speaking of top stocks that offer monthly payouts, SmartCentres Real Estate Investment Trust (TSX: SRU.UN) can be a solid addition to your dividend income portfolio. This real estate investment trust (REIT) is famous for the durability of its dividend payments and high yield. It currently offers a monthly dividend of $0.154 per share, which reflects an attractive yield of over 8.3% (calculated on its closing price of $22.42 on June 4).
This REIT offers a high-quality real estate portfolio that helps it generate solid same-property net operating income (NOI), which supports its payouts. It has ownership interests in 193 properties. This includes 155 retail properties. This higher concentration of retail properties adds stability to its cash flows and drives its occupancy rate.
Moreover, the REIT benefits from a high-quality tenant base, a high retention rate, and solid cash collection. SmartCentres’s leadership said during the first-quarter (Q1) 2024 conference call that the leasing interest for existing and new builds remains strong, indicating that its occupancy rate will likely remain high and could improve from current levels. Moreover, the REIT is witnessing lease extensions or renewals with strong rental increases, which will likely boost cash flows.
While the REIT’s retail properties add stability and drive its cash flows, the company is also focusing on developing mixed-use properties, which will drive demand for its real estate and open up new avenues of growth.
Its strong pipeline of mixed-use projects, underutilized land bank, high occupancy rate, and solid customer retention suggest that SmartCentres could continue to enhance its shareholders’ returns through regular monthly dividend payments. Moreover, it has a higher mix of fixed-rate debt, which insulates against the prolonged high interest rate environment.
In summary, SmartCentres’s high and dependable yield makes it a compelling monthly dividend stock.
Pizza Pizza Royalty
Among the Canadian stocks offering monthly cash dividends, investors could consider Pizza Pizza Royalty (TSX: PZA). It operates quick-service restaurants under the Pizza Pizza and Pizza73 brands under a franchise model. Moreover, it primarily generates its income from royalties.
It’s worth highlighting that Pizza Pizza Royalty distributes nearly all of its available cash (after retaining reserves) in the form of dividends. Further, Pizza Pizza Royalty increased its cash dividend three times in 2023. This shows management’s commitment to returning higher cash to its shareholders.
Currently, Pizza Pizza Royalty stock pays a monthly dividend of $0.077 per share. This translates into a yield of 7% based on its closing price of $13.27 on June 4. The company is expanding its store presence in Canada and focusing on improving its price and sales mix to drive income and future dividend payouts.
Overall, Pizza Pizza Royalty’s high yield and management’s focus on returning higher cash to its shareholders make it an attractive dividend stock that offers monthly cash.
