If you’re looking for one of the best ways to earn passive income in Canada, monthly dividend stocks could be a great addition to your portfolio. Unlike quarterly dividends, many stocks listed on the Toronto Stock Exchange pay investors 12 times a year, providing consistent cash flow to reinvest or use as passive income.
With market uncertainties still in play due to trade war concerns and uncertainties about future rate cuts, owning stocks that provide reliable income could help stabilize your portfolio. In this article, I’ll introduce two top Canadian stocks that pay dividends every single month, helping investors generate steady cash regardless of market conditions.
Peyto Exploration stock
If you don’t know it already, Peyto Exploration & Development (TSX:PEY) is one of Canada’s top natural gas producers, with a focus on low-cost, high-efficiency operations in Alberta’s Deep Basin. After rallying by over 25% in the last year, PEY stock trades at $15.99 per share with a market cap of $3.2 billion. It pays a monthly dividend with an impressive annualized yield of 8.3%, meaning investors get a steady stream of cash every single month.
In the third quarter of 2024, Peyto’s revenue rose 19.4% YoY (year over year) to $259.3 million due mainly to its recent acquisition of Repsol Canada Energy Partnership. This deal has already doubled its production from 23,000 to 46,000 barrels of oil equivalent per day. The company also generated $154.3 million in funds from operations last quarter, keeping its balance sheet strong despite weaker natural gas prices.
There are many fundamental factors that make Peyto a solid stock pick for reliable monthly income. First, its effective hedging strategy protects earnings even when gas prices dip. Second, its low operating costs help sustain profitability. And third, the company has big expansion plans as it aims to invest $450 to $500 million in 2025 to boost production further. Given these factors, Peyto is a top stock worth holding onto for investors who want a steady income.
NorthWest Healthcare stock
Just like Peyto, NorthWest Healthcare Properties REIT (TSX:NWH.UN) is another stock that could keep cash flowing into your account every month.
NorthWest owns and operates healthcare real estate, including hospitals, clinics, and medical office buildings across the globe. Following a 9.2% rise in the last year, its stock currently trades at $4.74 per share with a market cap of $1.2 billion, and its annualized dividend yield sits at 7.6%.
Recently, NorthWest has been selling its non-core assets, which are likely to help it cut debt significantly and tighten its operations with better profitability. In the third quarter of last year, the real estate investment trust’s (REIT’s) revenue slipped 12% YoY to $107 million due to asset sales, but its same-property net operating income grew positively by 5% YoY, showing rental strength.
As a result, NorthWest currently has a 13.4-year average lease term and a solid 96.1% occupancy rate. With $1.3 billion in asset sales in 2024 and a more streamlined business, NorthWest could now be a more stable, high-yield investment for monthly income seekers.
