There’s a reason why many investors prioritize generating reliable passive income when they put their hard-earned money to work in the stock market.
When you own stocks that pay consistent dividends month after month, it gives you a ton of flexibility. You can reinvest those payouts to help your portfolio compound faster, use them to cover expenses without selling some of your investments, or even just sit on them to build a bigger cash position for the next market dip or buying opportunity.
Furthermore, high-yield stocks that deliver monthly dividends are even more appealing because the cash flow is more significant and comes more often, making it easier to budget or reinvest sooner.
The most important factor, as always, though, is ensuring the companies you buy have solid and reliable operations. High-yield, monthly dividend stocks are compelling, but only if you can have the confidence to buy and hold for years.
So, with that in mind, if you’re looking for high-quality, high-yield income stocks to buy in February, here are two of the best to consider.
Source: Getty Images
A reliable monthly dividend stock with a simple model
When it comes to finding reliable, high-yield stocks that consistently return cash to investors, there’s no question that Pizza Pizza Royalty (TSX:PZA) is consistently at the top of that list.
Pizza Pizza is one of the best income stocks Canadians can buy because it has one of the most straightforward royalty businesses on the TSX.
Because Pizza Pizza simply collects a royalty from all the sales done at Pizza Pizza and Pizza 73 locations across the country, its revenue never fluctuates much year over year and therefore is highly predictable.
Furthermore, because the fund has minimal expenses, essentially all that revenue gets returned to investors after taxes or paid. That’s why it’s such a reliable income stock to buy. It’s simple to understand, and the business model is incredibly low-risk.
Furthermore, Pizza Pizza has proven to be one of the most defensive options in the restaurant space. Not only does it offer affordable options, but it also has one of the best-known brands in Canada.
So, with the stock offering a current yield of 5.7%, and with consistent long-term growth potential as it looks to open more stores and continue to grow sales, it’s easily one of the best income stocks to buy in February.
One of the best income stocks to buy in the energy sector
In addition to Pizza Pizza, Freehold Royalties (TSX:FRU) is another strong income stock to consider buying for 2026 and beyond, that offers an even higher yield today of 6.1%.
As a royalty stock like Pizza Pizza, Freehold also has a straightforward, low-risk business model that allows it to return a ton of cash to investors each month.
The reason its business model is so simple is that Freehold doesn’t drill wells or operate energy-producing assets itself. Instead, it collects royalties on production from third-party operators.
That gives Freehold high-margin cash flow with very low operating costs and no capital spending requirements.
It also means Freehold benefits from exposure to commodity prices, but at the same time, the royalty model helps buffer some downside risk because its costs are minimal. When oil and gas production rises, royalties increase without extra expense.
Furthermore, Freehold constantly keeps its payout ratio manageable, usually between 60% to 80% of its funds from operations, which not only ensures the dividend remains sustainable, but it also allows Freehold to build cash positions which it can use to expand its royalty interests.
So, if you’re looking for a reliable income stock to buy with a yield of more than 6%, Freehold is one of the best names to consider today.
