Monthly dividend stocks are an attractive investment due to their frequent payouts, which boost passive income and help meet regular financial commitments. Thankfully, the TSX has a few fundamentally strong stocks that generate steady passive income. Additionally, these stocks are currently trading at attractive prices and are affordable to all investors.
Against this background, let’s look at two Canadian stocks that pay monthly dividends.
NorthWest Healthcare
Northwest Healthcare Properties REIT (TSX:NWH.UN) is a top stock that pays dividends every 30 days. This real estate investment trust (REIT) focuses on high-quality healthcare properties, a sector known for its stability and consistent demand, which, in turn, supports its solid financials and regular dividend payouts.
Northwest Healthcare’s portfolio includes various healthcare facilities, with tenants ranging from large hospital operators to healthcare practitioners, many of whom are backed by government funding. This ensures steady, reliable rental income, which is crucial for the REIT’s financial health and ability to pay dividends.
At the end of the second quarter (Q2 2024), Northwest reported an impressive occupancy rate of around 97%, with a weighted average lease expiry term of 13.4 years. Over 85% of these leases are indexed to inflation, meaning rental income adjusts upward in response to inflationary pressures, further securing cash flow.
As of June 30, 2024, the REIT’s global rent collection rate was nearly 99%. Moreover, Northwest executed 810,000 square feet of leasing deals in the first half of the year, with a retention rate exceeding 80%. These figures show the solid demand for its properties. Northwest has been divesting non-core assets to bolster its balance sheet and enhance liquidity. These strategic sales have helped reduce Northwest’s consolidated debt to gross book value to 47.1%, including convertible debentures.
With its strong portfolio and efforts to streamline operations, Northwest is well-positioned to maintain steady cash flow and dividend payments, even in challenging economic times. Further, the recent rate cut by the Bank of Canada suggests that the borrowing costs will decline, adding another catalyst to real estate investments like NorthWest.
The essential nature of healthcare services and its high-quality tenant base means demand for Northwest’s properties will remain strong. The REIT currently pays a monthly dividend of $0.03 per share, translating to a high yield of over 7.2%.
Whitecap Resources
Whitecap Resources (TSX:WCP) should be on your radar for monthly passive income. The energy company acquires and develops petroleum and natural gas assets and pays a monthly dividend of $0.061 per share. This translates into an annualized yield of 7.5%, making Whitecap an attractive option for income-focused investors.
Whitecap boasts a strong portfolio of low-decline, high-value reserves that fuel its production volumes and financial performance. This financial strength makes its payouts reliable. Notably, the company’s funds flow per share has risen at an average annualized rate of 13% since 2010. This growth was driven by the continued increase in production and supported shareholder-friendly moves such as stock buybacks and dividend payouts.
The company continues to expand its production in 2024, which will support its revenues and funds flow and enable Whitecap to boost its shareholder value through dividends. In the long term, Whitecap Resources is well-positioned to sustain its payouts. Its high-quality assets, increasing average production volumes, debt reduction, and strengthening its balance sheet augur well for future growth, supporting its monthly dividend distributions.
In summary, Whitecap Resources could be a solid addition to any dividend-focused investment portfolio due to its high yield, consistent growth, and focus on rewarding its shareholders.
