Earn $500 a Month With These 3 Stocks (Possibly Tax-Free!)

Last week was challenging for equity markets, with the S&P/TSX Composite Index falling 6.3%. Donald Trump, the president of the United States, announced reciprocal tariffs on goods imported from countries that impose levies on United States goods, which has weighed on investors’ sentiments and dragged the equity markets down.

Given the uncertain outlook and falling interest rates, investors could acquire quality monthly paying dividend stocks to earn a stable monthly passive income. An investment of $27,000 in each of the following three stocks could help you earn a monthly payout of over $500. Also, you can avoid taxes on these payouts by making these investments through your TFSA (tax-free savings account).

SmarCentres Real Estate Investment Trust

SmartCentres Real Estate Investment Trust (TSX:SRU.UN) owns and operates 195 income-producing properties with a total leasable space of 35.3 million square feet. The REIT leased around 192,353 square feet of vacant space during the fourth quarter, raising its occupancy rate to 98.7%. It had renewed around 91% of leases maturing by the end of last year at a rental growth rate of 8.8%. Amid the solid operating performance, its net income and other grew by 10.2%, while fund flows from operations with adjustments per unit grew by 9.8%.

Moreover, SmartCentres REIT has a solid developmental pipeline, with 1 million square feet of sites under construction. Also, its developmental permissions for 59.1 million square feet of mixed-use properties boost its long-term growth prospects. These growth initiatives and healthy occupancy and collection rates could continue to drive its financials and cash flows, thus supporting its future dividend payouts. Its monthly dividend payout of $0.1542/share translates into a forward dividend yield of 7.5% as of the April 4 closing price.

Pizza Pizza Royalty

Pizza Pizza Royalty (TSX:PZA) is another monthly paying dividend stock I am bullish on due to its asset-light business model. The company owns and operates Pizza Pizza and Piza 73 brand restaurants and has adopted a highly franchised business model. It collects royalties from its franchisees based on their sales. So, rising prices will have less of an impact on its financials, thus generating healthy cash flows.

Although it intends to pay all available cash to its shareholders to enhance their returns, the company makes allowances for reasonable reserves amid seasonality issues that are inherent to the restaurant industry and its intent to create equal dividend payouts.

Further, the restaurant chain has added 45 new restaurants to its royalty pool and removed 20 restaurants that closed their operations at the beginning of this year, thus increasing its restaurant count in the royalty pool to 794. Its everyday value offerings, innovative and creative bundles, and marketing initiatives across channels could boost its same-store sales and support its financial growth. So, I believe PZA is well-equipped to continue paying dividends at a healthier rate. PZA’s forward yield currently stands at 7.2%, making it an excellent buy.

NorthWest Healthcare Properties REIT

My final pick would be NorthWest Healthcare Properties REIT (TSX:NWH.UN), which owns and operates highly defensive healthcare properties across seven countries. Its long-term lease agreements with government-backed tenants support its higher occupancy and collection rate. Also, its inflation-indexed lease agreements shield its financials in an inflationary environment.

Moreover, the healthcare REIT raised around $1.4 billion last year through non-core asset sales, using the net proceeds to lower its debt by $1.1 billion. Continuing its asset sales, the company sold 33% of its interest in Assura earlier this month, raising $70 million. Further, the company recently received an investment-grade credit rating, lowering its cost of capital. Considering all these factors, I believe that NorthWest, which offers a forward dividend yield of 7.6%, could continue paying dividends at a healthier rate.