The optimism surrounding the recent rate cuts in the United States and Canada has driven the TSX Composite benchmark to new heights in September 2024. When the stock market is already trading at its highest levels in history, it’s easy for investors to feel like the opportunity to earn solid returns has passed. However, dividend investing could offer a time-tested way to earn reliable income, even in a rising market. But how much capital do Canadians need to invest to generate $500 in monthly dividends?
In this article, I’ll try to answer this question in simple terms to show you how achievable this goal could be. But before we crunch the numbers, let me highlight two of the best monthly dividend stocks on the Toronto Stock Exchange you can consider right now.
Whitecap Resources stock
Whitecap Resources (TSX: WCP) is the first option, especially if you’re looking for a high-yield energy stock. It’s a Calgary-based energy firm that primarily focuses on acquiring and holding interest in oil and gas assets. After rallying by more than 60% over the last three years, WCP stock currently trades at $10.34 per share with a market cap of $6.2 billion. At the current market price, this monthly dividend stock offers an impressive annualized yield of 7.1%.
In the second quarter of 2024, Whitecap posted record production of 177,314 barrels of oil equivalent per day with the help of strong output from its Montney, Duvernay, and conventional assets. Higher production and firm oil prices helped the company post a solid 22.8% increase in its quarterly revenue to $980.4 million. Although higher capital spending affected its bottom line last quarter, its funds flow rose 11% sequentially.
Besides its strong balance sheet, Whitecap’s continued focus on strategic acquisitions and increasing shareholder returns through dividends make it really appealing for long-term dividend investors.
Sienna Senior Living stock
Sienna Senior Living (TSX: SIA) could be another top monthly dividend stock on the TSX today. This Markham-based company mainly focuses on providing a variety of senior living services through its large network of retirement residences and long-term-care (LTC) facilities across Canada. It currently has a market cap of $1.4 billion as its stock trades at $16.91 per share with 47.3% year-to-date gains.
The strong performance of both LTC and retirement segments has helped Sienna deliver robust revenue and net operating income growth in recent quarters. With the growing population of seniors in Canada, the demand for Sienna’s services is likely to surge in the coming years, which could accelerate its financial growth trends.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND PER SHARE | FREQUENCY | TOTAL MONTHLY PAYOUT |
| Whitecap Resources | $10.34 | 3,600 | $0.0608 | Monthly | $219 |
| Sienna Senior Living | $16.91 | 3,600 | $0.078 | Monthly | $281 |
| Total | $500 | ||||
| Prices as of Sep 25, 2024 |
Invest this amount to earn $500 per month in dividend income
If you purchase 3,600 shares each of Whitecap and Sienna, you could expect to earn roughly $500 in total monthly dividends from both. To buy these many shares of both companies at their current market prices, however, you’ll require an investment of around $98,100.
Although this example gives a clear picture of how investing in high-yield stocks like Whitecap and Sienna can help you meet your passive-income goals, you must not forget to diversify your portfolio by including fundamentally dividend stocks from other sectors to minimize risk.
