Creating a reliable source of passive income is one of the key goals for many investors, and many Canadian dividend stocks offer an easy way to achieve this. By carefully selecting high-yield dividend stocks, you can create a steady income stream that supports your financial goals for the years to come. You can either use this extra income to supplement your regular income, reinvest it for compound growth in the long run, or save it for a rainy day.
In this article, we’ll look at one of the best monthly paying dividend stocks in Canada that could provide you with $100 per month in passive income if you buy 649 shares of it right now. Let’s dive into the fundamentals of this top stock.
SmartCentres REIT stock
The stock I’m talking about is SmartCentres Real Estate Investment Trust (TSX:SRU.UN), one of the largest owners and operators of shopping centres in Canada. If you don’t know it already, SmartCentres has a strong portfolio of 193 high-quality properties across the country worth around $11.9 billion, with a total leasable area of 35.1 million square feet.
The real estate investment trust (REIT) currently has a market cap of $3.5 billion as its stock trades at $24.11 per share after rallying by 9.6% in the last month. At this market price, SmartCentres offers an attractive annualized dividend yield of 7.7% and distributes its dividend payouts every month.
Top reasons to buy this monthly dividend stock now
One of the main reasons that makes SmartCentres REIT a reliable monthly dividend stock to buy for the long term is its strong tenant base. Notably, large publicly listed companies like Walmart, Dollarama, TJX, Canadian Tire, Loblaws, Best Buy, and Lowe’s are some of its key tenants. These companies not only have strong financial positions but are also likely to grow faster than other retail players in the years to come. Such a strong tenant base gives SmartCentres the ability to maintain high occupancy levels and stable rental income even during tough economic times.
In the first quarter of 2024, the REIT reported a strong occupancy rate of 97.7%. SmartCentres saw a notable $5.9 million increase in net quarterly rental income compared to the first quarter of the previous year due mainly to the consistent high demand for retail spaces and its effective lease-up activities. In addition, its same property net operating income for the quarter also climbed by 3% year-over-year with the help of rising rental rates and its ability to retain tenants.
Last quarter, SmartCentres experienced significant leasing momentum, with 160,860 square feet of previously vacant space being leased. More importantly, some of the big names like HomeSense, Dollarama, Shoppers Drug Mart, Mark’s, and Scotiabank expanded their presence within SmartCentres’ portfolio.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY |
| SmartCentres REIT | $24.11 | 649 | $0.15417 | $100.06 | Monthly |
| Prices as of July 29, 2024 |
Foolish bottom line
Besides these positive factors, its robust development pipeline and diversification into mixed-use and self-storage properties make SmartCentres REIT a great monthly dividend stock to buy. If you buy its 649 shares at the current market price with a total investment of $15,647, you can expect to earn $100 each month from its dividends. While this example should give you a good idea of how you can generate monthly passive income, you should always remember to diversify your portfolio instead of relying solely on one stock or sector.
