Investing in high-yielding, monthly dividend-paying stocks is an excellent strategy for earning a stable passive income and hedging against rising commodity prices. Investors could also reinvest their passive income to earn superior returns. Against this backdrop, let’s look at three monthly dividend-paying stocks that offer over 7% dividend yields.
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NorthWest Healthcare Properties REIT
First on my list would be NorthWest Healthcare Properties REIT (TSX:NWH.UN), which owns and manages 186 healthcare properties across seven countries. It has signed long-term lease agreements with government-backed tenants, which allows it to enjoy higher occupancy and collection rates. In the June-ending quarter, the REIT posted impressive occupancy and collection rates of 96.5% and 99%, respectively.
Moreover, NorthWest Healthcare sold its United Kingdom portfolio for $885 million earlier this month. The completion of this transaction marks the end of its previously announced strategic review process. Overall, it has sold 46 non-core assets for gross proceeds of $1.4 billion. The company has used the net proceeds from these sales to lower its debt levels. The company’s leverage stood at 42% after the completion of its United Kindom portfolio sales, a substantial improvement compared to 47.7% at the end of last year.
Further, NorthWest Healthcare has planned to develop next-gen assets that can create long-term earnings growth for its shareholders. Considering its stable cash flows and healthy growth prospects, I believe the company’s dividend payouts are safer. Meanwhile, the company currently offers a forward dividend yield of 7.5% and trades at an attractive NTM (next 12 months) price-to-earnings multiple of 18.8.
Pizza Pizza Royalty
Second on my list would be Pizza Pizza Royalty (TSX: PZA), which operates Pizza Pizza and Pizza 73 brand restaurants through its franchisees. It collects royalties from franchisees based on sales. So, its financials are less susceptible to rising commodity prices and wage inflation.
After posting positive same-store sales growth for 12 quarters, the company’s same-store sales fell by 3.9% in the June-ending quarter. The company’s management has blamed the challenging economic environment for the decline. However, management is hopeful that its high-quality, value-oriented menu offerings will help retain its existing customers and win new ones. Moreover, the company has opened 25 restaurants in Canada and two in Mexico this year. Continuing its expansion, the company projects its restaurant count to increase by 3-4% this year.
Given its asset-light business model and restaurant expansion initiatives, I believe PZA is well-equipped to continue rewarding its shareholders by paying dividends at a healthier rate. Currently, it offers a forward dividend yield of 7.2% and trades at a price-to-book multiple of 1.4, making it an excellent buy.
SmartCentres Real Estate Investment Trust
Third on my list would be SmartCentres Real Estate Investment Trust (TSX: SRU.UN), which owns and operates 195 properties across Canada. During the second quarter, its same properties NOI (net operating income) grew by 2.2% while its occupancy rate rose 0.5% to 98.2%. Further, the company renewed 86.2% of all the spaces maturing this year, with rent growth of 8.5%. Supported by these solid operating performances, its net rental income grew by 2.6%. However, its FFO (funds from operation) per unit declined by 9% to $0.50 due to increased interest expenses amid higher interest rates and lower capitalization.
Given its 57.5 million square feet of mixed-use development permissions, SmartCentres’s developmental pipeline looks solid. Of these permissions, the company is currently constructing 0.8 million square feet of space. Considering its solid operating metrics and healthy growth prospects, the company’s future dividend payouts look safer. With a monthly dividend of $0.1542/share, the company offers a healthy forward yield of 7.7%. Further, its valuation also looks healthy, with its price-to-book multiple at 0.8. Considering all these factors, I believe SmartCentres is an ideal buy for income-seeking investors.
