Can you earn $500 in dividends monthly? The answer is yes, and the easiest route is through income stocks paying monthly dividends. However, the pre-conditions are a seed capital of $85,800 and a 7% dividend yield. If you don’t have the lump sum, you can still achieve the financial goal over time with two monthly dividend stocks.
Whitecap Resources (TSX:WCP) and Slate Grocery (TSX:SGR.UN) are the ideal combination in August. Both pay monthly dividends and with an average dividend yield of 8.42%, you need to accumulate $35,700 worth of shares ($71,400 combined) to generate $500.99 in monthly passive income. If the yields remain constant, it might take 10 years, more or less ($7,140 per year), to hit the target.
Steady performer
Whitecap Resources is among the steadiest performers in the energy sector. At $10.46 per share, current investors are up 23.07% year to date and partake in the 7.04% dividend. The $6.27 billion oil and liquids-weighted growth company commits to focus on profitable production growth to support and sustain the monthly dividend payouts to shareholders.
In the second quarter (Q2) of 2024, total revenue and net income rose 12.75% and 28.26% to $905.4 million and $244.5 million compared to Q2 2023. The quarter’s highlights include the strong production results in Whitecap’s Montney and Duvernay assets and significant contributions from the conventional assets in Alberta and Saskatchewan.
Management also credits the operational momentum following the active drilling program in Q1 2024. The average production grew 22% to a record 177,314 barrels of oil equivalent per day (boe/d) from a year ago. Oil and liquids accounted for 95% of the petroleum and natural gas revenue in Q2, while light and oil liquids were 64% of the production base.
Moreover, the funds flow in Q2 reached $426.4 million, enabling Whitecap to return $220 million to shareholders through monthly dividends.
According to management, the activity in the Western Canadian Sedimentary Basin is highly competitive, and competitors are big and small industry players. Nonetheless, the exceptional operational and financial performance in the first half of 2024 is encouraging. The momentum should be sustained in the second half until 2025.
Favourable fundamentals and tailwinds
Slate Grocery is a pure-play grocery-anchored real estate investment trust (REIT) operating in the United States. At $12.09 per share, this $714.9 million Canadian REIT pays a hefty 9.8% dividend. About 95% of the property portfolio is grocery-anchored, and 68.8% of the tenant base is essential tenants. They provide durable cash flows.
The portfolio occupancy rate is 94.2%, while the anchor occupancy is 97.9%. Kroger and Walmart are the top two tenants. Slate Grocery is present in 23 states and operates 116 properties. In the first half of 2024, rental revenue increased 2.53% to US$103.7 million, while net income jumped 85% to US$27.6 million compared to the same period in 2023.
Slate Grocery’s chief executive officer, Blair Welch, said the REIT enjoys robust leasing and rental rate increases. More importantly, the grocery-anchored sector maintains favourable fundamentals and provides tailwinds for the real estate portfolio.
Achievable task
Earning $500 monthly dividends or more is possible with high-yield stocks like Whitecap Resources and Slate Grocery. You can achieve the task by accumulating shares over a longer time frame and reinvesting the dividends 12 times a year.
