In the realm of Canadian investments, monthly dividend stocks offer a unique allure, providing a steady income stream for investors.
In this comprehensive guide, we delve into the intricacies of the top monthly dividend-paying stocks, surpassing the conventional approach and introducing you to unparalleled opportunities for stable cash flows.
Savaria (TSX: SIS): A Pioneer in Mobility Products
Savaria stands at the forefront of manufacturing mobility products, capitalizing on the booming industry driven by Canada’s aging population.
With a market capitalization exceeding $1 billion, Savaria boasts impressive growth potential. The company, a Canadian Dividend Aristocrat with a decade-long dividend growth streak, exhibits resilience in the face of challenges.
Key Metrics and Outlook:
- Dividend Growth: Savaria has consistently increased its annual dividend, showcasing a compound annual growth rate of nearly 9%.
- Financial Health: Despite a temporary slowdown in dividend growth post the Handicare acquisition, the company has improved its balance sheet, reducing payout ratios.
- Future Prospects: Sales are projected to surge by 7% in 2024, with EBITDA and adjusted earnings anticipated to witness substantial increases.
First National Financial (TSX: FN): Mortgage Maverick
Positioned as one of Canada’s premier non-bank lenders, First National Financial operates with efficiency, catering to both residential and commercial mortgages.
The company’s low-cost model, coupled with consistent monthly dividends since 2006, distinguishes it as a top performer in the financial services sector.
Key Advantages:
- Operational Efficiency: A streamlined operational model results in lower borrowing costs for clients.
- Stable Dividends: First National has a remarkable track record of consistent monthly dividends, with a payout history spanning over a decade.
Northland Power (TSX: NPI): Navigating the Renewable Wave
Northland Power emerges as a rare gem, a pure-play renewable energy company offering monthly dividends. Founded in 1987, Northland has expanded its operations across Canada, Colombia, and Europe, and is poised for further growth.
Growth Amidst Challenges:
- Renewable Focus: Northland’s commitment to renewable energy aligns with the evolving landscape, despite facing challenges in 2023 due to rising interest rates.
- Dividend Stability: While the company has not raised dividends recently, its prudent approach to expansion projects instills confidence in long-term dividend stability.
Whitecap Resources Inc (TSE: WCP): Riding the Oil and Gas Resurgence
In the aftermath of pandemic-induced lockdowns, Whitecap Resources has witnessed a remarkable resurgence in the oil and gas sector. Boasting significant cash flow, Whitecap presents an enticing option for monthly dividend seekers.
Post-Lockdown Prosperity:
- Cash Flow Surge: The oil and gas sector’s recovery has propelled Whitecap’s cash flow, making it an attractive choice for monthly dividends.
- Dividend Confidence: With a planned capital program in 2024 and a recent dividend increase of 26%, Whitecap showcases resilience amid market uncertainties.
Canada’s Monthly Dividend Payers: A Comprehensive Overview
To ensure a holistic understanding, let’s delve into a comprehensive list of Canadian monthly dividend-paying REITs and Income Trusts.
| Symbol | Payout Ratio (FFO) | Yield |
|---|---|---|
| AP.UN.TO | 77.00% | 10.04% |
| APR.UN.TO | 83.40% | 7.69% |
| AX.UN.TO | 51.70% | 9.29% |
| BEI.UN.TO | 34.00% | 1.75% |
Are Monthly Dividend Stocks a Prudent Investment?
Owning monthly dividend stocks can be a strategic move for investors seeking stable cash flows, particularly during retirement. The frequency of payments and the ability to reinvest monthly dividends make them an attractive option.
Cautionary Note:
Investors should distinguish between individual stocks and mutual funds or income funds. Monthly dividend stocks offer direct ownership and the potential for higher returns, unlike funds with associated management expenses.