Over the years, the dividends paid into your brokerage account really do add up. Undoubtedly, there are more bountiful and more frequent paydays to be had for those investors who choose to actively pursue dividend stocks, income ETFs, and high-yield REITs, rather than going too heavy on the growth names, many of which have little to nothing to offer in the way of dividends. Of course, dividends make a remarkable difference over the long run, especially in environments where prospective returns might not be nearly as generous as they have been in recent years.
Either way, this piece is going to narrow the focus to the dividend stocks that pay every month. Most dividend stocks pay quarterly, and while that’s fine for most investors, I do think that retirees with huge nest eggs to put to work might find it a bit more convenient to go for a monthly income payer. Personally, though, I think going for a quarterly payer and budgeting for each month makes the most sense, especially when you consider that most stocks do pay quarterly.
In my view, it’s not a huge deal. But if you just have to have a monthly payout, there are ample options in the ETF scene. In any case, let’s look at two compelling monthly payers that could make sense to stash away right here while the market is fresh off one of its most underwhelming months in a number of years, thanks in part to the Iran war and other issues that have caused many investors to act a bit more bearish going into the spring.
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Exchange Income Corp.
Exchange Income Corp. (TSX: EIF) is a monthly dividend payer that’s been hot of late, gaining more than 111% in the last two years. The 2.7% dividend yield isn’t towering anymore, but for those who just need to have a monthly payout and a huge amount of upside share price momentum, EIF stock could make sense at current levels.
For those not familiar with the firm, it’s a diversified industrial with a focus on M&A in aerospace and manufacturing. In many ways, EIF’s acquisition formula has been the secret sauce to its success. Being picky when it comes to M&A, I think, is best because it ensures a good deal and a good amount of potential synergies.
In any case, EIF may very well be one of the best monthly dividend stocks on the TSX. The company has money to spend and dividends to raise. The only question mark I have with the stock lies in the 33.5 times trailing price-to-earnings (P/E) multiple. That’s a bit too extended for my liking, especially now that the yield is in a more modest spot after more than doubling in two years.
Savaria
Savaria (TSX: SIS) is another monthly payer that’s got lots of momentum behind it. The stock is up 66% in the past year and is breaking out to new heights. The $1.9 billion firm has done a great job of reducing debt, and with growing demand for mobility products, especially among Baby Boomers, Savaria stands out as a great way to play a demand boom.
From stairlifts to wheelchair lifts, Savaria provides boring but highly profitable products and services, which, I think, could experience impressive demand through the next decade. With a 27.8 times trailing P/E multiple and a 2.2% yield (monthly payout), the name is definitely a must-watch for income fans who also want a good amount of dividend appreciation as well.
