Retirees: 2 TSX Stocks That Pay You Each Month

Although dividend payment frequency is a relatively minor concern when choosing dividend stocks, it can ease the process of managing passive income.

| More on:

There are quite a few elements you have to look into when you are choosing the right dividend stocks for your portfolio, including its yield, payout ratio, certain financial metrics, and dividend history. Dividend frequency, i.e., quarterly or monthly, is usually not a significant enough factor that may dissuade you from an otherwise solid dividend stock or encourage you to buy a relatively risky dividend stock.

But if it is an essential factor for you and you are looking for dividend payers with a monthly frequency, two stocks should be on your radar.

An apartment REIT

When it comes to monthly payouts, Canadian real estate investment trusts (REITs) are among the top choices since they usually stick to this payout frequency. Killam Apartment REIT (TSX:KMP.UN) is a decent pick among Canadian REITs, not just for its dividends and monthly payouts but also for its long-term capital-appreciation potential.

The REIT is currently offering payouts at a yield of around 3.9% and the payouts are quite financially sustainable. Killam used to grow its dividends and even though it hasn’t since 2021, the practice may come back, which will make Killam’s monthly payouts even more of an asset for its investors.

Killam also has business model and fundamental strengths that you might consider before you decide to invest in this REIT. It has a solid portfolio of real estate assets and has been steadily expanding into new regions.

The portfolio is also diversified asset-wise, with MHCs (Mobile Home Communities) making up a decent proportion of its overall portfolio. The financials are pretty consistent, with minor fluctuations.

A mortgage company

If you are seeking exposure to the mortgage industry in Canada, one of the bank stocks might be a more realistic pick. But even though big Canadian banks dominate the national mortgage industry, that’s just one element of their business.

A company like First National Financial (TSX:FN) might be better, as mortgage is its only business. It is among the largest non-bank mortgage lenders in Canada.

First National is also a generous dividend stock offering its investors monthly payouts. It’s also an established Dividend Aristocrat that has grown its payouts for 11 consecutive years and is currently offering a much more generous yield (6.6%) than most other Aristocrats in the Canadian financial sector (with similar track records).

The stock is currently both discounted and undervalued, considering its price-to-earnings ratio of just 8.2, so you might also experience some capital appreciation when the stock turns bullish.

Foolish takeaway

A Tax-Free Savings Account is the best place to stash these two monthly dividend payers. You will establish or augment an existing tax-free revenue stream, which will enhance your income or serve as passive income without beefing up your tax bill. That’s a two-pronged financial benefit.  

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 Adam Othman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Killam Apartment REIT. The Motley Fool has a disclosure policy.

More on Dividend Stocks

woman analyze data
Dividend Stocks

The Smartest Dividend Stocks to Buy With $1,000 Right Now

Do you have some cash to invest but want to earn a safe, low-risk dividend return? These dividend stocks are…

Read more »

An investor uses a tablet
Dividend Stocks

5 Canadian Dividend Stocks I Think Everyone Should Own

These Canadian stocks have a solid track record of dividend growth and offer compelling yields near their current market price.

Read more »

calculate and analyze stock
Dividend Stocks

This 4.4% Dividend Stock Pays Cash Every Single Month

This high-quality Canadian dividend stock offers an attractive yield and plenty of long-term growth potential.

Read more »

edit Safe pig, protect money
Dividend Stocks

3 TSX Dividend Aristocrats That Can Weather Any Economic Storm

Market volatility has investors wondering which stocks can withstand an economic storm. Here are three to consider today.

Read more »

people relax on mountain ledge
Dividend Stocks

Top Canadian Stocks to Buy for Passive Income 

Are you building a passive income portfolio that can beat inflation and provide higher purchasing power? You could consider buying…

Read more »

voice-recognition-talking-to-a-smartphone
Dividend Stocks

1 Magnificent Canadian Dividend Stock Down 40 Percent to Buy and Hold Forever

This magnificent Canadian dividend stock trades at a huge discount, offers stellar growth, and pays one of the best yields…

Read more »

A plant grows from coins.
Dividend Stocks

Top Canadian Stocks to Buy for Dividend Growth

Dividend growth stocks can be a good option to build a passive income that beats inflation and improves buying power.

Read more »

Concept of multiple streams of income
Top TSX Stocks

The Best Stocks to Invest $1,000 in Right Now

Here are some of the best stocks that every investor should own today to generate massive income and strong growth…

Read more »