I find monthly dividend stocks to be really appealing as they can turn a portfolio into a steady source of cash, while still giving investors the chance to grow money over time. For Foolish investors focused on reliable income, especially those building passive income inside a Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP), consistency can matter just as much as the yield itself.
That said, it is still important for investors to pick companies with solid balance sheets, growing earnings, and smart management teams that know how to handle capital. When these strengths are paired with reliable monthly payouts, you can end up with something powerful. Right now, Chemtrade Logistics Income Fund (TSX:CHE.UN) stands out as one such option for investors who want dependable cash flow backed by strong financial results. Let’s take a closer look.
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Chemtrade Logistics Income Fund
To put it simply, Chemtrade is a diversified industrial chemicals firm serving customers across North America and around the world. It operates through two main segments, sulphur and water chemicals, and electrochemicals.
This Toronto-based fund produces essential products such as sulphuric acid, water treatment chemicals, sodium chlorate, caustic soda, and ultra-pure acid used in semiconductor manufacturing. These products are important for industries like municipal water treatment, pulp and paper, oil and gas, and semiconductor production. Because these industries need a steady supply, demand for Chemtrade’s products tends to remain relatively stable, even when the broader economy faces uncertainty.
The fund currently trades at $16.02 per unit, giving it a market cap of about $1.8 billion. At that price, it offers a 4.5% annualized dividend yield, paid monthly. For investors who want predictable income, that monthly payment can be especially attractive. It can either help you cover living expenses or be reinvested to build wealth faster through compounding.
Here’s what supports its monthly dividends
In the latest reported quarter (ended in September 2025), Chemtrade’s revenue climbed 12.4% YoY (year-over-year) to $532.8 million. This increase was driven by higher selling prices and stronger volumes in merchant acid, Regen acid, and water solutions products within its sulphur and water chemicals segment.
For income investors, taking a look at a company’s distributable cash is also important. In the latest quarter, Chemtrade’s distributable cash after maintenance capital expenditures came in at $77.8 million. Similarly, its distributable cash per unit rose 24.4% YoY to $0.69.
On the brighter side, the fund’s payout ratio over the last 12 months was just 32%. That relatively low payout ratio suggests its monthly distribution is well supported by the cash the business generates, leaving a healthy margin of safety.
Balance sheet strength and growth visibility
A reliable dividend also depends on a strong balance sheet. At the end of the September 2025 quarter, Chemtrade’s net debt stood at around $941 million. That works out to a net debt-to-adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) ratio of 1.8 times based on the last 12 months. This level of leverage is moderate and gives the company enough room to invest in growth while maintaining stability.
The fund’s key growth projects include expansions in water treatment chemicals and upgrades to ultra-pure sulphuric acid production capacity. Its Cairo, Ohio-based ultrapure acid project has finished construction and is moving toward commercial ramp-up in 2026. In addition, its new water products facility in Augusta, Georgia is expected to begin operations soon.
Over the longer term, Chemtrade’s Vision 2030 plan targets mid-cycle annual adjusted EBITDA between $550 million and $600 million. If the company reaches those levels, it would further strengthen cash generation and support the sustainability of its monthly distributions.
