2 Dividend Stocks to Double Up on Right Now

Two stocks paying monthly dividends are excellent options for income-focused investors looking to increase their passive-income streams.

| More on:
data analyze research

Image source: Getty Images

The Bank of Canada (BOC) just initiated the first rate cut, and G7 central banks are watching in awe. In a press conference on June 5, 2024, BOC Governor Tiff Macklem said, “If inflation continues to ease, and our confidence that inflation is headed sustainably to the 2% target continues to increase, it is reasonable to expect further cuts to our policy interest rate.”

Stock market investors welcomed the 25 basis points cut, which brought down the policy rate to 4.75%. The impact was immediate, as all 11 primary sectors posted gains, and the index rose 0.75% to 22,145.02. Around 68% of TSX stocks, including real estate stocks, advanced following the rate cut announcement.

With this highly anticipated tailwind, income investors can double Whitecap Resources (TSX:WCP) and First Capital REIT (TSX:FCR.UN) holdings to earn generous monthly passive income.

Risk management program

Whitecap Resources is among the steadiest performers, notwithstanding the high interest rate environment. At $10.05 per share, current investors enjoy a 16.85% year-to-date gain on top of the 7.41% dividend yield. The energy sector’s year-to-date gain is 16.47%.

The $5.9 billion oil-weighted growth company boasts a premium asset base (light oil), which is a solid foundation for growth. Whitecap develops petroleum and gas properties in British Columbia (West Division) and the Central Alberta and West Saskatchewan regions (East Division).

Whitecap’s ongoing risk management program reduces revenue volatility, funds capital expenditures, and sustains shareholder cash dividends. The payout ratio is 57.93%.

Solid financial results

First Capital trades at a slight discount, although the price could increase gradually with more rate cuts. At $14.72 per share (-1.77% year to date), you can partake in the 5.87% dividend. Moreover, the lowering of interest rate is timely, as this real estate investment trust (REIT) has reported solid first-quarter (Q1) 2024 results.

The $3.12 billion retail landlord owns and operates grocery-anchored properties, mostly open-air centres, in areas with strong demographics, fundamentals, and leasing activities. In the three months ending March 31, 2024, net income rose 53.6% to $74.8 million compared to Q1 2023. The total portfolio occupancy was 96.2%.

Its president and chief executive officer, Adam Paul, said, “The strong fundamentals underpinning First Capital’s grocery-anchored retail portfolio, together with the successful execution of our capital allocation strategy, continue to deliver solid operating and financial results.”

Paul added, “The first quarter of 2024 was characterized by healthy leasing metrics, solid earnings growth and a stronger balance sheet, all of which will serve us well as we look ahead.” Notably, the portfolio average net rental rate increased 1.2% ($0.28 per square foot) versus Q4 2023 to a record $23.62 per square foot. The increase was net of closures due to tenant openings, rent escalations, and renewal lifts.

Also, during the quarter, First Capital disposed of non-grocery-anchored shopping centres worth $147 million in some development and density sites in Canada. The REIT’s long-standing goal is to pursue and unlock development potential and generate a stable and growing cash flow for investors through targeted investments.

Monthly income stream

Whitecap Resources and First Capital REIT are ideal investment options for income-focused investors. Besides the attractive dividend yields, invested capital transforms into monthly passive-income streams 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.

Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool recommends First Capital Real Estate Investment Trust and Whitecap Resources. The Motley Fool has a disclosure policy.

More on Dividend Stocks

Hourglass and stock price chart
Dividend Stocks

Stock Market Correction? These 2 Canadian Dividend Stocks Are a Steal

Dividend stocks can be a saviour, but can also lead to large portfolio gains when bought during stock market corrections.

Read more »

A bull and bear face off.
Dividend Stocks

U.S. Tech Stocks Are in Correction Territory… History Says This Happens Next

Canadian stocks like Alimentation Couche-Tard Inc (TSX:ATD) are currently better positioned than U.S. tech.

Read more »

Man in fedora smiles into camera
Dividend Stocks

Retirees: Is Fortis Stock a Risky Buy?

Fortis (TSX:FTS) is often regarded as a great long-term holding for income-seeking investors. But is this stock now a risky…

Read more »

a person watches a downward arrow crash through the floor
Dividend Stocks

Buy the Dip: 3 TSX Stocks Trading at Bargain Prices Today

These three TSX stocks might be near 52-week lows, but don't let that stop you from making a long-term investment.

Read more »

Caution, careful
Dividend Stocks

Sell-Off Alert: Why These TSX Blue-Chip Stocks Look Undervalued Now

These TSX stocks look mighty valuable right now, and come with outlooks that make each prime for the picking.

Read more »

dividends can compound over time
Dividend Stocks

Want a 6% Yield? 3 TSX Stocks to Buy Today

These TSX stocks offer yield of over 6% and are well-positioned to sustain their payouts and maintain consistent dividend payments.

Read more »

clock time
Dividend Stocks

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

A decade from now, these 2 dividend stocks could give you strong returns through dividends or capital appreciation, or both.

Read more »

Silver coins fall into a piggy bank.
Dividend Stocks

TFSA: 3 Top-Tier TSX Stocks for That $7,000 Contribution

The market is full of great long-term stock to fuel your TFSA. Here’s a look at three top-tier TSX stocks…

Read more »