Investing in monthly-paying dividend stocks would help generate a steady and predictable passive income, allowing investors to lower the impact of the inflationary environment. Investors can also reinvest these monthly dividends to earn superior returns. Although several stocks offer monthly dividends, I am bullish on the following three stocks due to their solid underlying businesses and stable cash flows.
Whitecap Resources
Despite the growing popularity of renewable sources, the International Energy Agency projects oil demand in 2030 to be 3.2 barrels per day higher than in 2023, provided no significant policy changes. The growing demand could support higher oil prices, benefiting oil-producing companies such as Whitecap Resources (TSX:WCP).
Meanwhile, the company continues to invest in strengthening its asset base and driving production. It has planned to invest around $0.9-$1.1 billion this year, with the management projecting its total production to be within 167,000-172,000 BOE/d (barrels of oil equivalent per day). The midpoint of the guidance represents an 8.3% increase from the previous year. Moreover, the company has planned to invest around $6 billion from 2025 to 2029, which could increase its production to 215,000 BOE/d, representing an annualized growth of 5%.
Amid these investments, WCN expects to generate $4 billion of free cash flow from 2025–2029. Meanwhile, it hopes to return $3 billion of the free cash flows to shareholders through share repurchases and dividends while utilizing the remaining $1 billion to lower its debt levels. Considering all these factors, I believe WCP’s future dividend payouts will be safer. With a monthly dividend of $0.0608/share, its forward yield currently stands at a juicy 7.16%.
NorthWest Healthcare Properties REIT
NorthWest Healthcare Properties REIT (TSX:NWH.UN) owns and operates 210 high-quality healthcare properties with a gross leasable area of 17,400 square feet across seven countries. The company enjoys healthy occupancy and collection rates, given its defensive healthcare portfolio, long-term lease agreements, and quality tenant base. Its lease agreements are inflation-indexed, thus shielding its financials from rising prices.
Further, NWH has strengthened its balance sheet by divesting non-core assets, which generated $566.5 million. It has utilized the proceeds to pay off high-cost-bearing debts. Further, the company has a solid developmental pipeline, which focuses on developing next-gen properties to create long-term shareholder value. Meanwhile, the company currently offers a forward dividend yield of 7% and trades at an attractive price-to-book multiple of 0.7, making it an excellent buy.
Pizza Pizza Royalty
Pizza Pizza Royalty (TSX:PZA) is another excellent dividend stock to have in your portfolio due to its asset-light model, stable cash flows, and high yield. It owns Pizza Pizza and Pizza 73 brand restaurants and operates them through franchisees, collecting royalty based on their sales. So, its financials are less susceptible to rising commodity prices and wage inflation.
Besides, the company has posted positive same-store sales for 12 consecutive quarters amid its value-oriented menu offerings, food and technology innovations, and promotional activities. Meanwhile, I expect its same-store sales to remain healthy in the coming quarters. Moreover, the company is constructing new restaurants and hopes to increase its restaurant count by 3-4% this year. It is also renovating its old restaurants, which could boost its footfall.
Considering all these factors, I believe Pizza Pizza is well-positioned to continue rewarding its shareholders with healthy dividends. It offers an attractive forward dividend yield of 7% and trades at a next-12-month price-to-earnings multiple of 13.2.
