ENB:CC - This 8.3% Dividend Stock Pays Cash Every Month

2024-06-11 17:00:00 ET

Top-quality dividend-paying stocks can help investors earn worry-free income regardless of market volatility. Thankfully, the TSX has several such fundamentally strong companies with stellar track records of dividend payments and growth, making them reliable bets for starting a passive income stream.

For example, electric utility company Fortis ( TSX:FTS ) is famous for its solid dividend payment history. It has raised its dividend for 50 years and plans to increase it at a mid-single-digit rate in the upcoming years.

Like Fortis, Enbridge ( TSX:ENB ) has increased its dividend for nearly three decades. Further, the energy infrastructure company’s dividend will likely increase by a low to mid-single-digit rate in the long term, driven by its growing earnings base.

Both Fortis and Enbridge are excellent investments to generate worry-free passive income, offering quarterly payouts. However, here I’ll focus on a high-quality Canadian stock that pays monthly dividends and offers a lucrative yield.

With this backdrop, let’s delve into a stock that pays monthly cash.

A top dividend stock offering monthly cash

SmartCentres Real Estate Investment Trust ( TSX:SRU.UN ) stands out as the top monthly dividend stock for the durability of its payouts and ultra-high yield. The real estate investment trust (REIT) sports a high-quality real estate portfolio anchored by retail properties that drive its net operating income (NOI), funds from operations (FFO), and monthly payouts.

The REIT’s monthly dividend is $0.154 per share, which reflects a high yield of over 8.3% based on its closing price of $22.33 on June 10.

While SmartCentres REIT’s ability to maintain and increase its monthly payouts and high yield makes it an attractive dividend stock, let’s look at the factors suggesting the REIT will continue to offer monthly cash and enhance shareholders’ value in the long term.

Here’s why SmartCentres is a reliable investment

SmartCentres’ monthly distributions are well-covered by a resilient real estate portfolio that consistently generates solid same-property NOI. For example, the REIT has ownership interests in 193 properties, including 155 retail properties. This high concentration of retail properties drives its occupancy rate, adds stability, and supports earnings.

SmartCentres boasts strong tenant retention rates and a high-quality tenant base, including leading retailers. Its solid tenant base, high cash collection rate, and lease extensions enhance cash flows.

Besides its solid fundamentals, SmartCentres REIT will likely benefit from robust leasing activity for existing properties and new developments, which will eventually drive its occupancy rates. Further, the growing demand for its properties reflects positive market dynamics, indicating potential for continued growth in its profitability.

While the firm is benefitting from a higher percentage of retail tenants, it is also focusing on developing mixed-use properties to capitalize on new growth avenues.

In summary, its strong fundamentals, a solid pipeline of mixed-use projects, a large underutilized land bank, and management’s commitment towards enhancing its shareholders’ returns make SmartCentres a dependable stock to earn monthly cash.

Bottom line

SmartCentres REIT is a top-quality monthly income stock offering high yield. Indeed, the table shows that by purchasing 1,000 shares of this REIT, investors can earn monthly cash of $154.

The post This 8.3% Dividend Stock Pays Cash Every Month appeared first on The Motley Fool Canada .

Fool contributor Sneha Nahata has no position in any of the stocks mentioned. The Motley Fool recommends Enbridge, Fortis, and SmartCentres Real Estate Investment Trust. The Motley Fool has a disclosure policy .

2024