This 5% Dividend Stock Pays Cash Every Month

This dividend stock is one of the best options out there for long-term investors. While the yield isn’t the highest, its long-term outlook is more than promising.

Amy Legate-Wolfe

Author Bio Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Her work can also be found at Canada's National Observer, where she writes on the business side of climate action. Before joining Motley Fool Canada, Amy wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Social Media Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published January 7, 2025 8:15 pm EST

Investing in monthly dividend stocks can be a savvy strategy for those seeking a steady income stream. Unlike quarterly or annual dividends, monthly payouts provide regular cash flow. This can be particularly beneficial for budgeting and managing expenses. The consistent income can help investors meet their financial goals more predictably, making monthly dividend stocks an attractive option for income-focused portfolios.

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Consider Extendicare

One such stock to consider is Extendicare (TSX: EXE), a leading provider of senior care services in Canada. Extendicare has a strong presence in the long-term care and home healthcare sectors, operating numerous facilities and offering a range of services across the country. This established position in a growing industry makes EXE a compelling dividend stock for investors seeking reliable monthly dividends.

In its recent financial performance, Extendicare reported robust third-quarter results for 2024. The dividend stock experienced a 10.2% year-over-year increase in average daily volume in the home healthcare segment, indicating strong demand and successful recruitment and retention programs.

Looking ahead, Extendicare’s future outlook appears promising. The dividend stock is actively pursuing long-term care redevelopment projects, with six homes under construction in Ontario and plans for additional projects, enhancing future growth potential. Furthermore, Extendicare established a new $275 million senior secured credit facility, providing additional flexibility for growth and capital allocation. These initiatives demonstrate the dividend stock’s commitment to expanding its services and improving its financial position. And this bodes well for sustaining and potentially increasing dividend payouts.

Looking ahead

Investors should also note Extendicare’s commitment to returning value to shareholders through dividends. The dividend stock has consistently declared monthly dividends, with a recent announcement of a cash dividend of $0.04 per common share for December 2024. This ongoing commitment to dividend payments underscores Extendicare’s financial stability and its dedication to providing shareholders with regular income.

Furthermore, Extendicare’s strategic acquisitions and partnerships have strengthened its market position. The completion of transactions with Revera and Axium has expanded its managed services and increased the number of beds under management. These strategic moves have not only enhanced revenue streams. These also positioned the dividend stock for continued growth in the evolving healthcare sector.

It’s also worth mentioning that Extendicare’s operations are supported by favourable demographic trends. As Canada’s population ages, the demand for senior care services is expected to rise, providing a tailwind for companies like Extendicare. This demographic shift suggests a growing market for the company’s services. This could translate into sustained revenue growth and, by extension, reliable dividend payments, making Extendicare not just a dividend stock that pays now but one that should continue growing for decades to come.

Bottom line

Monthly dividend stocks offer investors the advantage of regular income, aiding in financial planning and stability. Among them, Extendicare stock stands out as a strong candidate in this category, given its solid financial performance, strategic growth initiatives, and commitment to shareholder returns. As always, potential investors should conduct their own due diligence and consider their individual financial circumstances before making investment decisions. But this dividend stock looks like one long-term investment most investors won’t regret.