The Bank of Canada has cut interest rates six times in a row, with the benchmark interest rates falling to 3%. Amid falling interest rates, investors should look to invest in quality dividend stocks that offer monthly payouts to boost their passive income. Against this backdrop, here are my three top picks.
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Sienna Senior Living
Amid the aging population and rising income levels, the demand for senior services, including independent living, assisted living, and long-term care, is growing. So, I chose Sienna Senior Living (TSX: SIA) as my first pick. The company reported an impressive third-quarter performance, with its topline and total adjusted net operating income growing by 12.5% and 14.8%, respectively. Solid occupancy rates, annual rental rate increases, increased revenue from care and ancillary services, and higher government funding drove its financials.
Moreover, the Markham-based company has raised around $295 million by issuing additional shares and unsecured debenture. It expects to utilize the net proceeds from these fundings to support its growth initiatives and refinancing. In October, it acquired four new, high-quality properties in Western Canada and is also working on acquiring the remaining 30% stake in Nicola Lodge — a 256-bed long-term-care community in Port Coquitlam, British Columbia. These growth initiatives could support the company’s financial growth and future dividend payouts. Meanwhile, it currently offers a monthly dividend of $0.078/share, translating into a healthy forward dividend yield of 5.93%.
Whitecap Resources
Whitecap Resources (TSX: WCP) is another top monthly-playing dividend stock to have in your portfolio due to its consistent dividend growth and high yield. Supported by its healthy financials, the company has paid $2.2 billion in dividends since January 2013 and has repurchased shares worth $742 million since May 2017. The company expects its 2024 production to be around 174,000 boe/d (barrels of oil equivalent per day), higher than its earlier guidance and 13% year-over-year growth.
Moreover, the Calgary-based oil and gas production company has planned to invest around $1.1-$1.2 billion this year, strengthening its production capacity. Meanwhile, it expects its 2025 production to be between 176,000-180,000 boe/d, with the midpoint of the guidance representing a 2.3% increase from 2024 expected production. With a net debt of $1 billion, the company’s debt-to-EBITDA (earnings before interest, tax, depreciation, and amortization) ratio stands at 0.5. Further, WCP has a healthy long-term growth potential, with its total production projected to reach 215,000 boe/d in the next five years.
Given its production growth, healthy oil and natural gas prices, and solid financial position, WCP is well-equipped to continue rewarding its shareholders with healthy dividends. It currently offers a juicy dividend yield of 7.51%, making it an ideal buy.
SmartCentres Real Estate Investment Trust
Another monthly dividend stock I am bullish on is SmartCentres Real Estate Investment Trust (TSX: SRU.UN), which operates 195 strategically located properties across major Canadian markets. Last week, the company reported an impressive fourth-quarter performance, with its same-property net operating income growing by 6%. It also leased 192,353 square feet of vacant space during the quarter, raising its occupancy rate to 98.7%. It renewed and extended around 91% of the leases maturing in 2024, with a solid 8.8% rental growth.
Amid these solid operational performances, its net rental income and others grew by 10.3% to $141.6 million during the quarter. Also, the REIT generated $122.12 million of cash from its operating activities, representing a 19.5% increase from the previous year. The company has a solid developmental pipeline with 59.1 million square feet of developmental permissions, with around one million square feet of site currently under construction. These developmental activities could support its financial growth growth and future dividend payouts. With a monthly payout of $0.1542/share, it offers a forward dividend yield of 7.34%.
