Planning for your retirement often involves thinking about how you’ll generate a steady income stream – one to support your lifestyle once you’re no longer working. One popular strategy for Canadians is to invest in stocks that pay dividends on a monthly basis, especially within a Tax-Free Savings Account (TFSA) or a Registered Retirement Savings Plan (RRSP).
If you had around $8,200 to invest, putting it into a mix of companies that pay monthly dividends could provide you with a nice, regular income. Let’s look at three dividend stocks that fit this bill. Today, those will be Pizza Pizza Royalty (TSX:PZA), SmartCentres Real Estate Investment Trust (TSX:SRU.UN), and CT Real Estate Investment Trust (TSX:CRT.UN).
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Pizza Pizza
First up, we have Pizza Pizza Royalty. This well-known Canadian brand and its business model is based on collecting royalties from restaurants. As of writing, it offers a monthly dividend of $0.0775 per share. If you add that up over the year, it works out to an annual yield of about 6.7%.
Looking at earnings, Pizza Pizza reported a net income of $31 million, with a profit margin of 77.8%. It also continues to grow its presence, having opened 48 new restaurants across Canada in 2024, bringing the total to over 800 locations. While sales at existing restaurants did see a small dip of 3.9%, it’s working on things like value promotions and improving digital experience to drive growth. So, you get a familiar brand, a nice monthly income, and potential for the business to grow.
SmartCentres
Next, we have SmartCentres Real Estate Investment Trust (REIT). It’s one of the biggest REITs in Canada, and focuses on retail and mixed-use properties. It has a large portfolio of 195 properties across the country, and an occupancy rate at an impressively high 98.7%. In 2024, SmartCentres reported revenue of $953.1 million and a net income of $236.8 million.
The dividend stock offers a monthly distribution of $0.15417 per unit, which translates to an annual yield of around 7.3%. It’s been seeing good momentum in leasing activities and has some strategic developments in the works. This contributes to a strong financial performance. With a focus on well-located retail properties that attract a lot of shoppers, SmartCentres provides a solid income stream.
CT REIT
Finally, we have CT REIT. As the name suggests, the dividend stock focuses on retail properties that are primarily leased to Canadian Tire. For the year ending December 31, 2024, the dividend stock reported revenue of $578.69 million and a net income of $199.68 million. It has strong financial health, with a gross profit margin of 78.28% and a net profit margin of 34.51%.
CT REIT offers a monthly dividend of $0.0771 per unit, resulting in an annual yield of approximately 6.3%. Because the main tenant is a stable and well-established retailer like Canadian Tire, this REIT offers a reliable source of monthly income for investors.
Bottom line
If you were to split your $8,200 Canadian dollar investment equally among these three stocks, you’d be putting roughly $2,733 into each. This would give you diversified exposure to different parts of the economy: food services through Pizza Pizza, retail real estate through SmartCentres, and retail property leasing through CT REIT. Based on current dividend yields, this allocation could generate around $500 in annual income! This approach not only provides you with a regular income stream but also offers the potential for the value of your investments to grow over time.
Investing in these Canadian dividend stocks can be a smart way to help support your retirement lifestyle. The consistent payouts, strong financial footing, and diversification across different sectors can provide a solid base for a steady income. Just remember that it’s always a good idea to do your own thorough research or talk to a financial advisor to make sure these investments align with your personal financial goals and how much risk you’re comfortable taking.
