Investing in high-yielding dividend stocks would be an excellent strategy for earning a stable passive income. Passive income could act as a hedge against rising prices and allow investors to reinvest it to earn superior returns. Meanwhile, you can buy the following three high-yielding, monthly paying dividend stocks for under $20.
NorthWest Healthcare Properties REIT
NorthWest Healthcare Properties REIT (TSX:NWH.UN) would be my first pick due to its defensive healthcare portfolio, stable cash flows, and high yields. The company has signed long-term lease agreements with credit-worthy or government-backed tenants, thus allowing it to enjoy high occupancy and collection rates. Most of its lease agreements are inflation-indexed, shielding its financials from rising interest rates.
Further, NorthWest Healthcare continues improving its financial position by lowering its leverage. Since last year, the company has sold $566.5 million worth of non-core assets and unlisted securities. The company has used the net proceeds from these sales to repay higher interest-bearing loans. Further, the company’s developmental pipeline looks healthy, with the company planning to invest in next-gen assets to deliver long-term earnings growth.
Meanwhile, NorthWest Healthcare offers a monthly dividend of $0.03/share, with its forward dividend yield currently at 7%. Also, it trades at a healthy price-to-book multiple of 0.7, making it an excellent buy.
Whitecap Resources
Another top stock that I am bullish on is Whitecap Resources (TSX: WCP), which reported an impressive second-quarter performance last week. Supported by an active first-quarter drilling program, the start of its Musreau facility, and solid operational execution, its average production grew by 22% to 177,314 barrels of oil equivalent per day. Meanwhile, its top line and net income grew by 22.9% and 39.4, respectively. It generated a free fund flow of $222.6 million, representing a 12.8% increase from the previous year.
Its debt levels declined from $1,361.2 million in the last year’s quarter to $1,297 million, with its debt-to-EBITDA (earnings before interest, tax, depreciation, and amortization) standing at 0.6. Moreover, Whitecap Resources has planned to invest around $6 billion over the next five years to grow its average production at an annualized rate of 5%. Amid rising demand, petroleum products could continue to trade at elevated prices in the coming years.
Higher production and elevated prices could boost its financials, thus making its future dividend payouts safer. Currently, its forward yield stands at 7% while its NTM (next-12-month) price-to-sales multiple stands at 1.7, making it an excellent buy.
Pizza Pizza Royalty
Another top monthly-paying dividend stock I am bullish on is Pizza Pizza Royalty (TSX: PZA) due to its asset-light business model, stable cash flows, and high dividend yield. It operates a highly franchised business, collecting royalty based on sales. So, its financials are less susceptible to rising prices and wage inflation.
PZA has posted positive same-store sales for the last 12 quarters amid its product and technology innovations, value offerings, and promotional activities. Further, it is expanding its footprint and hopes to increase its store count by 3-4% this year. It is renovating old restaurants, which could also improve the footfall of those restaurants. The increase in restaurant count and positive same-store sales could boost its royalty income, thus allowing it to continue rewarding its shareholders with healthy dividends. Meanwhile, it currently rewards its shareholders by paying a monthly dividend of $0.0775/share, with its forward yield at 6.91%.
