PZA:CC - 3 Monthly-Paying Dividend Stocks to Earn a Stable Passive Income
2024-07-11 16:10:00 ET
Last month, Statistics Canada announced that the annual inflation rate stood at 2.9% in May, higher than 2.7% in April. The increase in fresh fruit and vegetables, meat, and non-alcoholic beverages drove grocery prices by 1.5%. Meanwhile, shelter inflation rose 6.4%. With the rising prices eating into your pockets, investors should look to earn a secondary or passive income that can lower the impact of rising prices.
Investing in high-yielding, monthly-paying dividend stocks would be an excellent strategy for earning a stable passive income. Meanwhile, here are three top monthly-paying dividend stocks you can buy now.
SmartCentres Real Estate Investment Trust
SmartCentres Real Estate Investment Trust ( TSX:SRU.UN ) is an integrated real estate investment trust (REIT) with a diversified portfolio of 193 properties and a gross leasable area of 35.1 million square feet. The company enjoys healthy occupancy and collection rates due to its strategically located properties, higher retention rate, and high-quality tenant base. The company’s lease-up activities and lease renewals at improved rental rates could also boost its financials in the coming quarters.
Further, SRU.UN has a solid pipeline of developmental projects, with 56 million square feet of mixed-use development permissions. Of these permissions, around 0.9 million square feet of area is under construction. Given these growth initiatives, the company is well-positioned to support its future dividend payouts. Meanwhile, it currently pays a monthly dividend of $0.1542/share, translating into a forward yield of 8.16% based on its July 10th closing price. It trades at an attractive NTM (next-12-month) price-to-earnings multiple of 18.3, making it an excellent buy for income-seeking investors.
Extendicare
Extendicare ( TSX:EXE ) offers care and services for senior citizens across Canada. It operates 123 long-term-care (LTC) homes and annually delivers 10.2 million hours of home healthcare services. The company’s operating metrics are improving, with home healthcare average daily volume growing by 11.4% in the March-ending quarter. The LTC average occupancy rate increased by 90 basis points to 97.5%.
The demand for home health and LTC services is rising amid the aging population. Meanwhile, Extendicare has formed a joint venture to redevelop five LTC projects in Ontario, which would replace 1,121 Class C beds with 1,280 new beds. Further, it is working on 15 redevelopment projects in Ontario, which would replace 2,211 Class C beds with 3,032 new beds. The company has also strengthened its balance sheet by divesting a 256-bed LTC redevelopment project in Orleans, Ontario. It has also sold assets of a former Class C LTC home in Sudbury.
Given its growth prospects and improving operating metrics, I believe Exendicare’s future dividend payouts are safe. Meanwhile, it offers a healthy forward dividend yield of 7.28%, making it an ideal buy.
Pizza Pizza Royalty
Pizza Pizza Royalty ( TSX:PZA ) would be another top monthly-paying dividend stock to have in your portfolio due to its asset-light business model and stable cash flows. It operates 776 Pizza Pizza and Pizza 73 brand restaurants through franchisees while collecting royalties based on their sales. So, the company’s financials are immune to rising prices, thus delivering stable and predictable cash flows. Further, the company’s strong value messaging and promotional brand activities have resonated with its customers, as it has posted positive same-store sales growth for 12 consecutive quarters.
Further, PZA focuses on expanding its footprint and expects to increase its store count by 3-4% this year. New restaurant openings and same-store sales growth could boost its royalty income in the coming quarters. Considering its healthy growth prospects and stable cash flows, PZA is well-positioned to continue rewarding its shareholders with healthy dividends. With a monthly dividend of $0.0775/share, it offers a forward yield of 7.19%.
The post 3 Monthly-Paying Dividend Stocks to Earn a Stable Passive Income appeared first on The Motley Fool Canada .
Fool contributor Rajiv Nanjapla has no position in any of the stocks mentioned. The Motley Fool recommends SmartCentres Real Estate Investment Trust. The Motley Fool has a disclosure policy .
2024