The Bank of Canada has slashed its benchmark interest rates three times this year and could continue with its monetary easing initiatives as inflation cools. Amid falling interest rates, monthly-paying dividend stocks have become attractive for pensioners who want to earn a stable income to meet recurring expenses, such as rent and utility expenses. Against this backdrop, let’s look at three top monthly paying dividend stocks that can boost your passive income.
NorthWest Healthcare Properties REIT
NorthWest Healthcare Properties REIT (TSX:NWH.UN) would be an excellent monthly paying dividend stock to have in your portfolio. Given its highly defensive healthcare properties, government-backed tenants, and long-term lease agreements, the company enjoys higher occupancy and collection rates, irrespective of the market conditions. The weighted average lease expiry of these contracts stands at 12.9 years. Besides, its inflation-indexed leases shield its financials against rising prices.
Further, NWH has strengthened its balance sheet through its non-core assets sales program. Since its inception in August last year, the company has generated $1.4 billion by selling 46 properties and $170.3 million from selling unlisted securities. The company has utilized the net proceeds from these sales to pay off higher interest-bearing debt, thus lowering its leverage. Besides, the REIT is developing next-gen properties that can create long-term earnings growth. Given its improving financial position, defensive healthcare portfolio, and healthy growth prospects, I believe NWH’s future dividend payouts will be safer. Meanwhile, it currently pays a monthly dividend of $0.03/share, translating into a healthy forward yield of 6.5%.
Whitecap Resources
Whitecap Resources (TSX: WCP) is an oil and natural gas-producing company offering an attractive forward yield of 7.1%. The company had excellent operational success in the first half of this year, with its total production volumes increasing by 14.8% year-over-year. Meanwhile, management hopes its strong performance will continue amid its ability to mitigate downtime and develop assets in Montney and Duvernay.
Amid these solid performances and healthy growth prospects, management projects its average total production this year to come closer to the higher end of its earlier provided guidance of 167,000–172,000 barrels of oil equivalent per day. Further, the company has planned to make a capital investment of $6 billion from 2025 to 2029, which could increase its total average production at an annualized rate of 5%. Also, WCP’s management expects to become debt-free by the end of 2029. Considering all these factors, I believe the company is well-positioned to continue paying monthly dividends at a healthier rate.
Pizza Pizza Royalty
Another monthly paying dividend stock that would be a worthy buy for income-seeking pensioners would be Pizza Pizza Royalty (TSX: PZA), which operates Pizza Pizza and Pizza 73 brand restaurants through its franchisees. Although the company’s same-store sales fell in the June-ending quarter, the management hopes to retain its existing customers and win new ones through its high-quality, value-oriented menu offerings. Further, its old restaurant renovation program could boost footfall.
Besides, PZA continues to expand its footprint and hopes to increase its traditional restaurant network by 3-4% this year. These expansion plans could boost its cash flows, thus making its future dividend payouts safer. Currently, the company offers a forward dividend yield of 7.2% and trades at a cheaper price-to-sales multiple of 0.7, making it an attractive buy.
