Top Canadian Stocks to Buy for Monthly Income

The market is full of great stocks that can provide a healthy dividend to investors. But investors can only buy a few for monthly income.

Here’s a look at some of those top Canadian stocks to buy for monthly income, and why they belong in your portfolio.

This monthly income pick tackles a major problem

One of the principal ways to establish a monthly income stream is to own a rental property. Unfortunately, achieving that has become difficult in recent years. That’s because rising home prices, coupled with high interest rates, have priced out most buyers on the market.

Fortunately, there is an alternative option for investors to buy for monthly income generation, and that’s RioCan Real Estate (TSX: REI.UN).

RioCan is one of the largest REITs in Canada. The company has historically focused on commercial retail properties, but over the past decade, RioCan has diversified into mixed-use residential sites too.

And it’s those residential properties that represent a huge opportunity for investors looking to buy for monthly income. RioCan’s growing portfolio of mixed-use residential units are located in high-traffic areas in Canada’s metro markets.

In other words, they are in high-demand areas. Adding to that appeal is the fact that those sites comprise residential towers sitting atop several floors of retail. This offers investors a lower-risk option compared with owning and renting a single-unit property.

Perhaps best of all is RioCan’s monthly distribution. Like a landlord collecting rent, RioCan offers a real option for investors looking at investments to buy for monthly income. And let’s not forget that, unlike a rental unit, a RioCan investment comes without a mortgage, property taxes, repair bills, or tenants.

As of the time of writing, the yield on RioCan’s monthly distribution works out to an impressive 5.9% yield. This means that a $30,000 investment in RioCan (which is far below a typical downpayment) will generate just shy of $150 each month.

How about a diversified company with a dozen subsidiaries?

Another superb pick for investors looking to buy for monthly income is Exchange Income Corporation (TSX: EIF).

For those unfamiliar with the company, Exchange is an acquisition-focused company that owns over a dozen subsidiaries. Those subsidiaries are broadly classified under two categories: aviation and manufacturing.

The intriguing part of Exchange’s subsidiaries is that they each have two factors in common. They all generate cash for the company, and each operates in niche markets or segments where there is little, if any, competition.

By way of example, on the aviation side, this includes providing passenger and cargo services to remote regions of Canada’s north. Turning to manufacturing, this includes custom manufacturing services for the defence sector, as well as cell tower construction.

The result is a steady stream of revenue that provides enough for the company to invest in growth while also paying out a juicy dividend. As of the time of writing, Exchange offers investors a tasty 5% yield. Using that same $30,000 example will generate just over $122 each month.

Another point for investors looking to buy for monthly income is that Exchange has provided investors with healthy bumps to that dividend over the years. In fact, the company has hiked that dividend 17 times over the past 19 years.

The stocks to buy for monthly income are here

No stock, even the most defensive is without some risk. Fortunately, both RioCan and Exchange offer some defensive appeal in addition to their juicy yields.

In my opinion, one or both stocks warrant a small position in any well-diversified portfolio.

Buy them, hold them, and enjoy that monthly income.