Establishing a juicy passive-income stream is a dream sought by every investor. Unfortunately, many view that dream as unattainable, questioning how much is needed to invest to generate healthy dividends each month.
In truth, it’s not as scary as it sounds. In fact, it is easier than many investors may think. Here’s a look at how both new investors and seasoned pros alike can generate a stream of juicy dividends every month.
Start with a predictable income generator
Owning a rental property remains one of the most lucrative long-term ways to establish a passive-income stream. Unfortunately, rising interest rates and surging down payment requirements have priced out many would-be investors.
Another option to consider that is equally lucrative is investing in RioCan Real Estate (TSX:REI.UN).
RioCan is one of the largest real estate investment trusts (REITs) in Canada. The REIT has a growing portfolio of mixed-use residential properties that cater to the surging demand for housing. Those units are located in Canada’s major metro areas along in-demand traffic corridors.
For investors, RioCan represents a means to invest like a landlord without the mortgage, tenant or property tax woes. It’s also significantly lower risk compared with owning a single property.
Perhaps best of all, RioCan pays out a monthly distribution, much like a landlord collecting rent. As of the time of writing, RioCan offers a juicy yield of 6.60%.
Sprinkle in some growth
It would be nearly impossible to compile a list of stocks that can help generate dividends every month without mentioning at least one of Canada’s big banks.
The big bank for investors to consider adding to their portfolio right now is Canadian Imperial Bank of Commerce (TSX:CM).
CIBC is the fifth-largest of the big banks. The bank also has a smaller international footprint over its larger peers, but that shouldn’t defer prospective investors.
If anything, CIBC is firing on all cylinders lately. The bank posted strong quarterly numbers, including a handsome year-over-year revenue bump of 8%. That growth comes despite a very challenging environment of sticky inflation and higher interest rates.
Turning to dividends, CIBC boasts over 150 years of providing juicy payouts without fail. Today, that yield works out to an impressive 5.46%, making the bank stock one of the better-paying options on the market.
CIBC also has an established practice of providing generous annual upticks to that dividend. In short, CIBC is a great stock to consider buying that can add to the income of dividends every month.
Don’t forget the monthly income
Another unique option for investors looking to generate dividends every month is Exchange Income Corporation (TSX:EIF). Exchange operates a portfolio of over a dozen subsidiary companies. Those subsidiaries generate a reliable revenue stream that is both stable and growing.
More importantly, those subsidiaries, which are broadly grouped between manufacturing and aviation segments, help generate free cash for the company.
This allows Exchange to invest in acquiring additional subsidiary companies while also paying out a very generous dividend.
As of the time of writing, Exchange offers investors a monthly dividend with a whopping 6.03% yield. The company has also provided investors with juicy annual upticks to that yield in 17 of the past 19 years.
Generating dividends every month is possible
Building a portfolio that can provide dividends every month requires picking the right stocks and some patience, but it can be done. The stocks mentioned above can not only meet that goal but will continue to provide juicy dividends every month for decades.
Here’s how investing $40,000 into each of the above not only meets that $500 per month threshold but handily surpasses it.
| Company | Recent Price | No. of Shares | Dividend | Total Payout | Frequency |
| RioCan Real Estate Investment | $16.81 | 2,379 | $1.11 | $220.05 | Monthly |
| Canadian Imperial Bank of Commerce | $65.96 | 606 | $3.60 | $545.40 | Quarterly |
| Exchange Income Corporation | $43.75 | 914 | $2.64 | $201.08 | Monthly |
In my opinion, one or all of the above stocks should be core holdings in any well-diversified portfolio.
