If you plan to invest your Tax-Free Savings Account (TFSA) dollars for monthly income, consider top Canadian stocks that pay dividends every 30 days. These dividend-paying stocks can help you earn tax-free passive income for years.
Against this background, here are three fundamentally strong dividend stocks for your TFSA portfolio to earn monthly income.
Source: Getty Images
Monthly income stock #1
Canadians considering monthly cash could add SmartCentres REIT (TSX: SRU.UN) to their TFSA portfolios. This integrated real estate investment trust (REIT) has durable payouts and a long history of regular dividend distributions. Currently, it offers a per-share dividend of $0.154, reflecting a high yield of about 7.3%.
The REIT’s core retail properties, primarily grocery-anchored shopping centres, witness solid leasing demand, generate consistent income, and maintain high tenant retention rates. Further, these properties sport long-term leases and maintain a high occupancy rate. This stability supports its net operating income (NOI) and monthly payouts. In addition, SmartCentres’s mixed-use development pipeline will diversify its income stream, support profitability, and enhance long-term growth prospects. Further, its valuable land bank provides a solid foundation for growth.
Looking ahead, SmartCentres is poised to generate solid NOI, which is led by its resilient tenant base, high occupancy rate, strong renewal rates, and higher rents. Its growing NOI will enable the company to maintain its payouts in the coming years.
Monthly income stock #2
Firm Capital Mortgage Investment Corporation (TSX: FC) is another attractive monthly dividend stock for TFSA investors. This Canadian financial services company has a solid track record of monthly dividend payments and offers a high annualized yield of 7.8%, near the current market price.
Specializing in short-term real estate mortgage loans and related debt investments, Firm Capital has a conservative operating strategy. The company generates significant earnings from interest, fees, and other stable income sources, which supports regular payouts. Moreover, the company’s emphasis on real estate-backed assets and loan syndication enhances financial stability and reduces loan loss risks.
The company will benefit from its solid underwriting capabilities, diversified portfolio of predominantly first mortgages, and investment in market segments underserved by large lending institutions. These factors will enable First Capital to generate steady cash flows and will support its dividend distributions in the coming years.
Monthly income stock #3
Whitecap Resources (TSX: WCP) is another attractive dividend stock for generating monthly passive income. This oil and gas company offers a monthly payout of $0.061 per share, translating into a high yield of 7.5%. Since 2013, Whitecap has distributed over $2.1 billion in dividends. In addition to dividends, it also rewards its shareholders with share buybacks.
Over the past decade, Whitecap has consistently increased its production and funds flow per share, which enabled it to return substantial cash to its investors. Thanks to its high-quality assets and growing production volumes, the company generates solid financials and significant free cash flows.
Its focus on high condensate production and drilling efficiencies and prudent cost management will likely enhance operational profitability, supporting its payouts. In addition, Whitecap’s low maintenance capital needs, focus on debt reduction, and strong balance sheet will drive sustainable earnings and dividends.
