Investing in dividend stocks with monthly payouts can provide a steady and predictable income, making them attractive to investors seeking regular cash flow. The frequent payouts help manage cash flow, aligning dividend income with monthly expenses. Moreover, reinvesting the monthly dividends allows investors to take advantage of compounding more frequently, potentially leading to higher returns over time.
Thankfully, the TSX has several dividend-paying stocks that offer monthly payouts. Further, these Canadian stocks are backed by fundamentally strong businesses that support their monthly payouts.
With that background, let’s look at three stocks that pay monthly cash.
SmartCentres Real Estate Investment
Canadian real estate investment trusts (REITs), known for their high payout ratio, are an excellent option for investors seeking regular monthly cash. Among leading REITS, investors could consider SmartCentres Real Estate Investment Trust (TSX: SRU.UN) for its high-quality real estate portfolio, reliable payouts, and high yield.
SmartCentres primarily owns high-traffic retail centres, which generate strong net operating income (NOI) to drive its monthly distributions. Further, its tenants are top national and international retailers. Its high-quality assets and tenant base add stability to its cash flows, drive occupancy rates, and help maintain high rent collection rates.
Looking ahead, SmartCentres is well-positioned to deliver solid same-property NOI, driven by high occupancy and tenant retention rates. Moreover, increased leasing interest for both its new and existing properties and higher lease extensions and renewals augur well for future growth and will likely drive rents.
The REIT also owns a significant undeveloped land bank, which provides a solid base for future growth. Moreover, its focus on debt reduction and emphasis on diversifying its portfolio with the development of mixed-use properties will enable it to tap into new growth opportunities. In summary, investors can rely on SmartCentres to earn monthly cash. SmartCentres’s monthly dividend stands at $0.154 per share, reflecting a yield of 7.8% (based on its closing price of $23.66 on July 19).
NorthWest Healthcare REIT
Within the REITs sector, NorthWest Healthcare Properties (TSX:NWH.UN) could be another solid addition to earn monthly cash. This REIT focuses on the healthcare real estate spectrum, a defensive asset class that provides attractive risk-adjusted returns and supports its payouts.
NorthWest enjoys a high occupancy rate of over 96%, benefits from inflation-indexed leases, and boasts an average lease expiry term exceeding 13 years. These factors contribute to stable cash flows and reliable monthly payouts.
The REIT is actively working on deleveraging its balance sheet and exiting non-core businesses to enhance shareholder value. Additionally, the rising demand for essential healthcare services and the facilities to house these services is expected to drive NWH’s occupancy rate and cash flows.
Looking ahead, NorthWest’s focus on defensive real estate, its high-quality tenant base supported by direct or indirect government funding, and long-term leases position it well to generate steady cash flows. Further, the REIT offers a monthly payout of $0.03 per share, resulting in a high yield of 7.3%.
Pizza Pizza Royalty
Investors seeking steady monthly cash could find Pizza Pizza Royalty(TSX: PZA) attractive. This company, which operates quick-service restaurants under the Pizza Pizza and Pizza73 brands, offers monthly dividend payouts alongside a high yield, bolstering its investment appeal.
It’s worth noting that Pizza Pizza Royalty distributes all available cash after maintaining necessary reserves. This shows the company’s commitment to delivering value to its investors. In 2023 alone, Pizza Pizza raised its monthly dividend three times, resulting in a cumulative increase of 10.7%.
Looking ahead, Pizza Pizza’s strategic menu pricing, efforts to strengthen its store presence across Canada, and focus on food and technology innovation are likely to enhance customer experience, increase sales, and improve efficiency. This will enable the firm to return higher cash to its shareholders.
Pizza Pizza Royalty pays a monthly dividend of $0.077 per share, translating into a high of 7.1%.
