This 6.5 Percent Dividend King Pays Out Every Month

Besides Sienna’s focus on new projects, Canada’s demographics also support its growth prospects, making it a reliable monthly dividend stock to buy now.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Beginning investors seeking consistent income often look to dividend stocks that offer high yields. While high yields might sound appealing, they can also be risky and unreliable, especially if the company is unable to sustain its earnings and cash flow.

That’s why savvy income investors prefer dividend stocks that have a track record of increasing earnings over time and strong balance sheets to sustain their dividend payouts. One such Canadian dividend stock that offers both attractive yield and monthly payments is Sienna Senior Living (TSX:SIA).

A reliable Canadian monthly dividend stock

Sienna Senior Living has been a consistent provider of monthly dividends since its public listing in March 2010.

It hasn’t achieved “Dividend King” status, a label usually used for companies increasing dividends for over 50 years. However, it still stands out as a reliable Canadian monthly dividend stock for those looking to earn stable dividend income, making this TSX stock a “king” in its own unique way. Now, let me quickly highlight key fundamental factors that make Sienna Senior Living a really attractive dividend stock for income investors.

Sienna Senior Living stock

This Markham-headquartered company primarily focuses on providing seniors’ living and care services across Canada. Sienna currently operates 92 high-quality assets, including 42 long-term-care (LTC) communities, 39 retirement residences, and 11 managed residences. Last year, it generated most of its total revenues from the LTC segment.

Created with Highcharts 11.4.3Sienna Senior Living PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

It has a market cap of around $1 billion as its stock trades at $14.42 per share with nearly 26% year-to-date gains. At this market price, SIA stock offers roughly 6.5% annualized dividend yield and distributes its dividend payouts on a monthly basis.

Strong financials and solid fundamental outlook

In the first quarter of 2024, Sienna reported a solid 75.9% YoY (year-over-year) increase in same-property net operating income to $63.9 million, including $45.7 million in contributions from the LTC segment. The company’s total adjusted quarterly revenue rose by 19.9% YoY to $239.4 million with the help of annual rate increases and higher occupancy.

During the quarter, it also received government funding of $27 million, helping it offset pandemic-related and inflationary cost pressures from previous years. To add optimism, Sienna’s LTC segment average total occupancy improved to 97.5% at the end of March 2024 from 96.8% a year ago.

Capitalizing on the recent funding environment improvement, Sienna is advancing the redevelopment of its LTC home in Keswick, Ontario. The project, slated to begin construction in the fourth quarter, involves transforming the existing 60-bed facility into a state-of-the-art 160-bed home. This redevelopment project, along with the North Bay and Brantford projects, is likely to yield an estimated 8% development return, brightening Sienna’s long-term financial growth prospects.

Foolish takeaway

In addition to these fundamental factors, Canada’s demographics also support Sienna’s growth prospects, with the population in the 85-plus age group expected to grow at a fast pace. As the population ages, the demand for LTC and retirement living services will likely increase significantly. That’s why I expect Sienna to continue rewarding its investors with handsome returns through a combination of capital appreciation and monthly dividend payments in the long run.

Just Released! 5 Stocks Under $50 (FREE REPORT)

Motley Fool Canada's market-beating team has just released a brand-new FREE report revealing 5 "dirt cheap" stocks that you can buy today for under $50 a share.

Our team thinks these 5 stocks are critically undervalued, but more importantly, could potentially make Canadian investors who act quickly a fortune.

Don't miss out! Simply click the link below to grab your free copy and discover all 5 of these stocks now.

Claim your FREE 5-stock report now!

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.

The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Fool contributor Jitendra Parashar has no position in any of the stocks mentioned.

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Dividend Stocks

Dividend Stocks

3 Canadian REIT Stocks to Buy and Hold for the Next Quarter-Century

These three Canadian REITs trade cheaply and are highly reliable, making them some of the best stocks you can buy…

Read more »

A train passes Morant's curve in Banff National Park in the Canadian Rockies.
Dividend Stocks

1 Practically Perfect Canadian Stock Down 24% to Buy Now and Hold for Life!

CNR stock is a top Canadian stock for investors, especially with shares down on the TSX today.

Read more »

Canada national flag waving in wind on clear day
Dividend Stocks

The Best Canadian Stocks to Buy Right Away With $30,000

If you have $30,000 you're willing to invest, these are some of the first Canadian stocks to consider on your…

Read more »

rail train
Dividend Stocks

What to Know About Canadian Pacific Railway Stock for 2025

CP stock has now gone through a major merger, so what do investors have to look forward to?

Read more »

ways to boost income
Dividend Stocks

Top Canadian Value Stocks I’d Buy for Dividend Growth and Appreciation

If you are looking for income and capital appreciation, here are three Canadian value stocks for a great total return…

Read more »

coins jump into piggy bank
Dividend Stocks

The Smartest Canadian Stock to Buy With $2,000 Right Now

The company’s powerful combination of growth, income, and value, positions it well to deliver solid returns, making it a smart…

Read more »

Transparent umbrella under heavy rain against water drops splash background. Rainy weather concept.
Dividend Stocks

This 10.6 Percent Dividend Stock Pays Cash Every Single Month

Are you looking to invest for a rainy day? This 10.6% dividend stock pays cash every month, irrespective of the…

Read more »

A worker gives a business presentation.
Dividend Stocks

Market Dip: Opportunity or Risk This April?

This market dip might have investors worried, but should they be excited instead?

Read more »