Owning high-quality Canadian dividend stocks, especially ones that return cash to investors every month, has several benefits.
Earning a return almost immediately after your initial investment helps lower risk and provides a steady stream of income regardless of short-term market fluctuations.
With non-dividend-paying stocks, you rely solely on the company’s growth and future profitability to drive the share price higher over time.
But with dividend stocks—especially high-quality ones—you start earning a return right away. Not only does this reduce risk, but it also allows you to reinvest cash more quickly, accelerating the power of compound interest.
And while plenty of Canadian stocks pay a monthly dividend, only a handful stand out as truly high quality.
So, with that in mind, if you’re looking to boost the passive income your portfolio generates, here’s why Morguard North American Residential REIT (TSX: MRG.UN) and its 4.4% dividend yield is one of the best stocks you can buy today.
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Morguard’s diversified portfolio makes it an ideal long-term investment
The majority of residential real estate investment trusts (REITs) on the TSX only own properties in Canada. While a diversified portfolio of properties across the country, run by a professional team of managers, can be a great investment and offers a lot of advantages over owning a single-income property, Morguard takes it to the next level by owning properties across the United States as well.
In fact, of the 42 residential properties in its portfolio, only 16 are located in Canada, with the other 26 diversified across nine different states south of the border.
The diversification is key, helping to mitigate against risks but also exposing Morguard to more growth opportunities as regional economies expand at different rates, with some markets strengthening while others stabilize or recover.
Plus, with over 12,000 suites in its portfolio, Morguard benefits from consistent cash flow and reduced vacancy risk, ensuring that even with some units unoccupied, overall occupancy remains high and rental income stays steady.
For example, at the end of 2024, Morguard’s Canadian portfolio had a 97% occupancy rate, while its U.S. portfolio had a 94% occupancy rate.
This strong occupancy, combined with its geographic diversification, makes Morguard a highly stable and reliable investment. Not only does it provide consistent rental income, but it also supports its ability to pay a dependable monthly dividend, making it an attractive stock for income investors.
And with its financial position strengthening and future growth on the horizon, Morguard’s long-term potential looks even more promising.
Why is Morguard one of the best monthly dividend stocks to buy now?
In addition to the compelling 4.4% dividend yield that Morguard offers, it also continues to have consistent growth potential, showing why it’s one of the best monthly dividend stocks you can buy now and hold for the long haul.
For example, analysts estimate that its revenue will continue to grow at more than 3% per year over the next two years. More importantly, though, its funds from operations (FFO) per unit will grow at more than 4% over the next two years.
That may not seem like explosive growth, but it shows what a stable and reliable investment Morguard can be for passive income seekers. It also shows the potential that investors have to see more increases in the distribution after Morguard just increased its monthly dividend payments at the end of 2024.
Not to mention, its FFO could also grow higher than those estimates if interest rates continue to fall both in Canada and the United States, which many analysts and economists are predicting.
One of the most compelling reasons for an investment in Morguard today, though, is the fact that it’s currently undervalued.
Not only is it trading nearly 15% off its 52-week high, but its forward price-to-FFO ratio is just 9.95 times, below its five-year average of 11.9 times and its 10-year average of 12.05 times.
So, if you’re looking to boost your passive income with a reliable monthly dividend stock, Morguard is certainly one of the best in Canada.
