Invest $25,000 in These 3 Dividend Stocks for $150 in Monthly Income

After seven consecutive rate cuts, the Bank of Canada paused its rate cuts on Wednesday, keeping its benchmark interest rate at 2.75%. In this low interest rate environment, investors can buy monthly-paying dividend stocks with high yields to earn a stable passive income. Meanwhile, an investment of $25,000 in the following three stocks could generate over $150 monthly. Let’s look at these stocks in detail.

SmartCentres Real Estate Investment Trust

SmartCentres Real Estate Investment Trust (TSX: SRU.UN) would be an ideal stock to earn a stable monthly income due to its high-quality asset base, higher occupancy and collection rate, and high yield. The company owns 195 properties in strategic locations across Canada. It leased 192,353 square feet of vacant space during the fourth quarter and renewed and extended 91% of the leases expiring last year with a solid rental growth of 8.8%. Amid these strong operating performances, its occupancy rate rose to 98.7%. Also, its net income and others grew by 10.2% to $141.6 million.

Further, SmartCentres REIT’s developmental pipeline looks solid, with 1 million square feet of sites under construction and 59.1 million square feet of mixed-use permissions. The company completed the construction of The Millway, a 458-unit purpose-built rental property, by the end of 2023. It has been progressing with its leasing activities and has leased 95% of the units by the end of 2024. These healthy growth initiatives could boost its financials in the coming quarters, thus allowing it to continue rewarding its shareholders with healthy dividends. The REIT’s monthly payout of $0.1542/share translates to a forward dividend yield of 7.26% as of the April 17th closing price.

Whitecap Resources

My second pick is Whitecap Resources (TSX: WCP). The oil and natural gas producer has been paying dividends since January 2013 at a healthier rate. It has returned around $2.2 billion in dividends and offers an attractive dividend yield of 8.91%. Over the last three years, the company has grown its average production at an annualized rate of 15.8% amid an expanding asset base. It has also repurchased 28.3 million shares during the period, thus boosting its production per share by around 57%. Amid these solid performances, the company has strengthened its balance sheet by bringing its net debt down to $933.1 million, while its debt-to-earnings before interest, taxes, depreciation, and amortization ratio stands at 0.34.

After investing $1.1 billion to drill 246 wells last year, WCP has planned to invest $1.1-$1.2 billion this year, strengthening its production capabilities. Amid these growth initiatives, the company’s management expects its total average production to grow by 1-3% and generate $550 million of free fund flows. Considering its healthier growth prospects, WCP could continue rewarding its shareholders with attractive dividends.

Pizza Pizza Royalty

Due to the stable cash flows from its highly franchised restaurant business and high dividend yield of 6.75%, I have chosen Pizza Pizza Royalty (TSX: PZA) as my final pick. The company collects royalties from its franchisees based on their sales. So, its financials are less prone to commodity price fluctuations and wage inflation, thus generating healthy cash flows and allowing it to pay dividends at a healthier rate.

Further, at the beginning of this year, PZA included 45 new restaurants in its royalty pool and removed 20 restaurants that had ended their operations, thus raising its store count by 25 units to 794. The company focuses on boosting its same-store sales through its value offerings, innovative and creative bundles, and effective marketing initiatives across multiple channels. These growth initiatives could boost PZA’s sales and royalty income, thus making its future dividend payouts safer.