A Perfect 10% Dividend Stock Paying Cash Every Month in a Volatile Market

Do you need some regular income in this volatile market? This dividend stock could be for you.

Canadians are feeling the heat when it comes to their finances. In these moments, stable income becomes more valuable than ever. That’s why a stock like Labrador Iron Ore Royalty (TSX: LIF), with its sky-high 10.42% dividend yield, is getting attention. So, let’s get into why.

investor looks at volatility chart

Source: Getty Images

About LIF

LIF isn’t your typical mining stock. It doesn’t operate mines or build new infrastructure. Instead, it collects royalties. Specifically, it owns a 15.1% stake in the Iron Ore Company of Canada (IOC) and earns a 7% gross overriding royalty on all iron ore products IOC sells. This gives LIF a more predictable, cash-generating business model that isn’t as exposed to the ups and downs of mining costs and labour disruptions. It’s essentially getting a steady cut of IOC’s sales without footing the bill for operations.

This model served investors well. Even as the price of iron ore bounced around due to global demand changes, LIF continued to reward shareholders. In its most recent earnings report for the first quarter of 2025, the dividend stock reported net income of $21.2 million and earnings per share (EPS) of $0.33. That was a drop from $0.93 EPS in the first quarter (Q1) of 2024, mainly due to lower iron ore prices and reduced volumes shipped. But the dividend wasn’t cut. LIF paid out $0.50 per share, which annualizes to a yield of over 10% based on the current share price of $29.27.

A strong dividend

That’s what makes LIF a compelling dividend stock in a volatile market. Even with commodity swings, the company has a long history of paying high dividends. It may not pay every month, but between the quarterly payouts and occasional special dividends, it generates income regularly enough to offer real comfort to income investors. Its trailing 12-month dividend total is $3.05 per share, and the payout ratio sits above 140%, which shows the company prioritizes shareholder returns, even during weaker quarters.

In fact, if investors were to put their TFSA contribution room aside for 2025 towards LIF stock, that $7,000 could earn $730 in annual income at writing. That would come to $60.75 in monthly income!

COMPANYRECENT PRICENUMBER OF SHARESDIVIDENDTOTAL PAYOUTFREQUENCYINVESTMENT TOTAL
LIF.TO$29.27239$3.05$728.95Quarterly$6,997.53

Stable and growing

LIF’s structure also offers peace of mind. It carries no debt and ended 2024 with a strong cash position and net working capital of $29 million. That’s a rarity in the mining space, where debt-fuelled expansion is common. This conservative approach gives LIF breathing room when markets dip or demand falters. For Canadians dealing with economic uncertainty and job concerns, this kind of steady, low-risk income can make all the difference.

And while it’s true that LIF’s earnings are tied to iron ore prices, the long-term demand story is still intact. Steel production continues to rise, especially in developing economies. As the global economy eventually recovers, iron ore prices should find support, which could lift LIF’s earnings again. In the meantime, the generous dividend is more than enough to keep many investors patient. In this kind of climate, dividend income can act like a financial anchor. It provides cash in hand when you need it most and helps reduce the temptation to panic during market swings.

Bottom line

LIF might not be the flashiest stock on the TSX, but it’s one that pays you to wait. Whether you’re trying to supplement your income, reduce portfolio risk, or simply breathe easier during volatile times, it earns a spot on the watchlist. A 10.42% yield doesn’t come around every day, and in this economic environment, getting paid to hold on is a win.

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

More on Dividend Stocks

happy woman throws cash
Dividend Stocks

The Ideal TFSA Stock: A 5.9% Yield-Paying Constant Cash

Enbridge’s predictable cash flows, substantial growth pipeline, and long history of dividend increases underpin its long-term investment appeal for TFSA…

Read more »

woman gazes forward out window to future
Dividend Stocks

Dividend Income in Retirement: What Could Go Wrong?

Dividend investing is a proven way to create income in retirement but you must know the risks you need to…

Read more »

The TFSA is a powerful savings vehicle for Canadians who are saving for retirement.
Dividend Stocks

A 5% Monthly Payer I’d Buy for My TFSA: About $100 a Month on $24,000

Canada’s largest residential landlord offers a high yield, reliable monthly income, and a tax-sheltered foundation for TFSA investors.

Read more »

Two seniors walk in the forest
Dividend Stocks

Can Dividends Replace a Paycheque in Retirement?

Can dividends in retirement replace your paycheque? Explore how Scotiabank, RioCan REIT, and Fortis can help build a steady retirement…

Read more »

Sliced pumpkin pie
Dividend Stocks

The Fees That Quietly Eat Into a Small Investment

Many funds charge outrageous fees, but broad market index funds like the iShares S&P/TSX Capped Composite Index ETF (TSX:XIC) usually…

Read more »

dividends grow over time
Dividend Stocks

The U.S. Dollar is Rising Again: Here’s What VFV Investors Should Know

VFV investors receive both U.S. equity returns and currency translation.

Read more »

businessmen shake hands to close a deal
Dividend Stocks

A Canada-India Trade Deal Could Be Big for Infrastructure: Is WSP Stock a Buy?

India could require roughly US$840 billion of urban infrastructure investment over 15 years.

Read more »

woman considering the future
Dividend Stocks

How Much Would You Need to Invest to Earn $100 a Month in Dividends?

These two monthly-paying dividend stocks can boost your passive income in this uncertain macroeconomic environment.

Read more »