Price appreciation is a bonus for people who invest in the stock market for income. Divided yield is the primary consideration, and companies that pay good dividends regularly are the top preference. The Toronto Stock Market has several dividend-payers, from small-cap to large-cap stocks.
However, mid-cap stocks Whitecap Resources (TSX:WCP) and SmartCentres (TSX:SRU.UN) have gained loyal followers for two reasons: high dividend yield and monthly cash payout. The second reason is a deal-clincher as you tend to earn more if you reinvest the dividends when you receive them (12 times a year).
You won’t spend more than $35 per share to own both dividend giants; given the average yield of 7.6%, an $11,500 investment in each ($23,000 combined) transforms into $145 in monthly passive income. Moreover, your capital will nearly triple to $68,674.03 in 15 years if you reinvest the dividends.
Profitable production growth
Whitecap Resources is growth-oriented and focused on profitable production growth. The $5.6 billion oil and liquids-weighted company expects to end 2024 with an average production of approximately 174,000 barrels of oil equivalent per day (boe/d), 5% above the original guidance for the year.
As of this writing, the energy stock trades at $9.49 per share and pays a lucrative 7.7% dividend. The 14.3-plus year-to-date gain stems from the impressive Q3 2024 financial results. In the three months ending September 30, 2024, revenue declined 7.5% year-over-year to $955.2 million, while net income rose nearly 80% to $274.2 million compared to Q3 2023.
According to management, a risk management program is in place to reduce revenue volatility and provide downward protection. It also enables Whitecap to fund capital expenditures, support dividends, and pay shareholders cash monthly. All its assets have significant growth potential, including accelerated growth in late 2026.
Whitecap’s competitive advantage is its highly economic drilling inventory in conventional light oil plays and unconventional liquids-rich Montney and Duvernay plays. They are well-positioned to provide decades of sustainable production and funds flow growth for decades.
The Board-approved $1.1 billion to $1.2 billion 2025 capital budget for 2025 could produce 176,000 to 180,000 boe/d on average and generate funds flow of up to $1.7 billion.
Strong retail fundamentals
Real estate investment trusts (REITs) are go-to investments for people seeking recurring monthly dividends. SmartCentres is a top pick for its size and generous dividends. At $24.87 per share (+7.2% year-to-date), you can partake in the 7.4% dividend yield.
The $4.2 billion fully integrated REIT dominates the retail space in Canada. It owns 195 properties, and 113 are Walmart-anchored centres. Its CEO, Mitchell Goldhar, said retail fundamentals outperform in 2024 due to strong momentum in leasing demand, besides the industry-leading 98.5% occupancy rate.
SmartCentres benefit from a strong rental growth rate of 6.1% and higher spreads on lease extensions. The growing recurring income from the mixed-used portfolio of multi-residential, self-storage, office and industrial properties complements Walmart’s resilient, grocery-anchored shopping centres.
The advantage of monthly cash flows
Whitecap Resources and SmartCentres are excellent dividend plays. Because the monthly dividend cash flows are stable, you can incorporate them into your monthly budget.
