My 2 Favourite Stocks for Monthly Passive Income

If you like monthly passive income and growth, these two dividend stocks could be a perfect fit for your portfolio right now.

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Key Points
  • Monthly dividends are rarer now as most stocks pay quarterly, but select REITs, industrials, and energy names still offer reliable monthly income plus growth potential.
  • Top picks: Chartwell (TSX:CSH.UN) and Exchange Income (TSX:EIF).
  • Chartwell (~2.9% yield) shows rising occupancy and strong FFO growth; Exchange Income (~2.8% yield) is diversified, delivered strong recent results, and has a long record of dividend increases.

If you want monthly passive income from stocks, you have to look a little harder these days. Most dividend stocks have turned to quarterly dividend schedules because they better align with quarterly reporting schedules.

Yet, there remain a few dividend stocks in sectors like real estate, industrials, and energy businesses where monthly dividends work. If I were looking for an attractive combination of growth and monthly income, these two dividend stocks are some of my favourites right now.

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Chartwell: A huge long-term tailwind and monthly passive income

With a market cap of $6.85 billion, Chartwell Retirement Residences (TSX: CSH.UN) is Canada’s largest retirement community provider. This is not such a bad place to have exposure over the coming decades.

Canada is about to be hit by a wave of retiring baby boomers. Chartwell has the communities to cater to their health, living, and community needs.

Chartwell just delivered strong first-quarter results. Property revenue rose 24%. Funds from operations per unit (a key metric for profitability in real estate) increased 35%!

Chartwell has been focusing on improving occupancy across its portfolio while prudently managing its cost structure. It is paying off. Today, Chartwell sits with 94.7% occupancy. It believes it will maintain over 95% for the rest of the year.

Chartwell pays a $0.05166-per-unit monthly distribution. That equates to a 2.9% dividend yield today. Chartwell just increased its distribution for the first time in several years.

Management believes it is perfectly positioned to keep growing that dividend from here. For a stock with a big growth tailwind, this is a great stock to pick up for monthly passive income.

Exchange Income: A diversified stock with rising monthly passive income

Exchange Income Corporation (TSX: EIF) has a market cap of $5.5 billion. This is an interesting industrial stock if you want exposure to a wide mix of different businesses.

Its largest segment provides air transportation services to remote regions in northern Canada. These are essential services to the communities they serve.

Exchange Income also operates niche aerospace businesses, including leasing, specialized parts, defence, air ambulance, and firefighting. On top of that, it has several industrial businesses focused on access solutions, manufacturing, infrastructure, and window systems.

Overall, it’s a diversified business that is much more resilient than a singular airline would ever be. The company has typically grown by acquisition. However, organic growth has recently ticked up as demand for several of its products and services has soared.

It just announced a quarter where revenues increased 30%, free cash flow surged 48%, and adjusted net income per share rose 217%. Despite not winning a major defence project in Australia, it is still projecting 16% growth in 2026.

It pays a $0.23 per share dividend every month. It yields 2.8% right now. The company has a record of growing its dividend annually for 18 of the past 20 years.

If it can continue to execute, there are likely more dividend increases to follow. Given that its balance sheet is in the best position it has been in several years, those increases are only becoming more certain. For a mix of growth and passive income, this is one of the best stocks in Canada today.

Fool contributor Robin Brown 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.

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