There’s something great about knowing your money works as hard as you do, especially when it sends a payout your way every single month without skipping a beat. That’s the comfort most income-focused Foolish investors look for. But finding monthly dividend stocks that offer reliable returns and solid fundamentals isn’t always easy.
In this article, I’ll highlight why NorthWest Healthcare Properties REIT (TSX:NWH.UN), a TSX-listed monthly dividend payer offering a 7.3% annualized yield, could be a great stock to buy in 2025.
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A top monthly dividend stock to buy in 2025
If you don’t know it already, NorthWest Healthcare Properties is a Toronto-headquartered real estate investment trust (REIT) that owns and operates medical office buildings, clinics, and hospitals. Its properties are mainly leased to long-term healthcare operators, making its cash flow relatively predictable even when the market isn’t.
Its stock currently trades at $4.87 apiece with a market cap of $1.23 billion. At this market price, it offers a healthy 7.3% annualized dividend yield, paid monthly. That payout has remained steady even as the company went through some big changes recently, including asset sales and refinancing moves.
A clear plan with results to show for it
After kicking off 2025 with a reset strategy, NorthWest Healthcare delivered some encouraging signs in the first quarter. The REIT’s adjusted funds from operations — the most important number for REIT investors — rose to $0.10 per unit in the latest quarter, keeping its payout ratio at a manageable 92%, down from 105% a year earlier.
In the latest quarter, the company also managed to improve its same property net operating income by 4.5% YoY with the help of higher rental income across all its regions. And with its occupancy rate at 96.5% and weighted average lease term at 13.6 years, NorthWest’s income visibility remains strong.
Playing defence the smart way
A potential red flag recently has been Healthscope, NorthWest’s second-largest tenant in Australia. Healthscope’s parent firm entered receivership in late May, which understandably raised concerns. But so far, Healthscope is still running its hospitals and continues to meet its lease obligations with NorthWest. While some of the rent has been deferred until October, it’s still backed by a strong hospital asset, and interest is being charged at 8%.
NorthWest is also engaging with Healthscope’s new financial managers and potential buyers to ensure a smooth transition. This hands-on approach, combined with tight lease structures, has kept the REIT’s risk contained for now. All this shows that while the REIT is not completely risk-free, it’s actively managing issues as they arise without losing focus on its long-term game plan.
Foolish bottom line
For investors looking for a monthly dividend stock with reliable passive income, NorthWest Healthcare Properties REIT checks many boxes. The yield is attractive at 7.3%, the cash flow is stabilizing, and the REIT is reshaping itself into a leaner and more focused business.
With strong leasing metrics and improving debt levels, it’s doing the tough work needed to stay resilient in a choppy market. That makes this REIT one of the more dependable monthly income ideas available on the TSX right now.
