Are you looking for affordable passive income stocks that pay monthly?
If so, you’re in luck.
The TSX Composite Index is home to many affordable value stocks, and some of them pay their dividends monthly. While some would say that picking stocks simply because they have a monthly payout schedule is pointless and doesn’t improve returns, there’s no denying that receiving monthly cheques feels nice. With that in mind, here are two TSX dividend stocks that pay monthly.
Sienna Senior Living
Sienna Senior Living (TSX:SIA) is an Ontario-based real estate company that operates retirement homes. The company’s niche makes it perfectly positioned to profit off of current demographic trends. Canada’s population is aging, with a nearly upside-down population pyramid. As the number of retirees swells, demand for senior living increases. So, Sienna Senior Living is remarkably well positioned in today’s economy.
Sienna Senior Living stock is popular among income investors because of its monthly payout. The stock pays out $0.08 in dividends per month, which works out to $0.96 per year. At today’s stock price of $15.54, that provides a 6.1% yield – far above average.
The fact that Sienna is positioned to profit off of current demographic trends can be seen in its growth rates. In the trailing 12-month period, the company has grown its revenue at 12%, its operating income at 45%, and its free cash flow at 55% year-over-year. The company has also compounded over the long term. For example, over the last 10 years, its revenue has increased by 8% per year, and its free cash flow has increased by 10.5% per year.
In addition to growing quickly, Sienna Senior Living is also quite profitable. It has a 7.3% free cash flow margin and a 6.8% return on equity, which are decent profitability metrics. As Ontario’s population continues aging, Sienna’s growth and profit metrics should improve.
First National
Our second monthly pay dividend stock is First National Financial (TSX:FN). It’s a Canadian non-bank lender that issues mortgages to Canadians who for whatever reason struggle to obtain bank loans. The company’s stock pays a $0.20416 monthly dividend, which works out to $2.45 per year. At today’s prices, that dividend provides a 6.4% yield, which is well above average.
First National Financial stock is fairly cheap, trading at 9.7 times earnings – a little lower than the average for the large Canadian banks. It’s profitable, with a 35% net margin and a 42% return on equity. It is also doing well with earnings performance. In its most recent quarter, FN’s revenue increased 20% and its earnings increased 40%. A pretty good showing.
One risk factor for First National today is falling interest rates. The company made a killing in 2022 and 2023 because of rising rates, but now the Bank of Canada is cutting. There could be some pressure on net interest income. Still, this company has grown and thrived over the years in all kinds of different interest rate regimes. I’d imagine it will perform at least serviceably in the years ahead.
