The 3 Top Monthly Dividend Stocks for 2022

These monthly paying dividend stocks are reliable sources to supplement your passive income.

| More on:

Dividend stocks are a reliable source to generate passive income. Further, there are plenty of companies that offer monthly dividends. So, if you are planning to buy monthly paying dividend stocks in 2022, consider these three TSX stocks for a reliable passive-income stream. 

Pembina Pipeline 

With its diverse and integrated energy infrastructure assets and highly contracted business, Pembina Pipeline (TSX:PPL)(NYSE:PBA) is a top stock to invest in for monthly dividend income. It’s worth noting that Pembina started paying dividends in 1997 and has paid more than $10.5 billion in dividends since then. 

Furthermore, its dividends have a CAGR of 4.9% in the last 10 years, while it is offering a stellar yield of 6.6% at current price levels. 

Pembina covers its dividends from the fee-based cash flows, while its payout ratio is sustainable in the long run. Looking ahead, Pembina will likely generate strong fee-based cash flows on the back of improving energy demand, high volumes and average realized prices, contractual arrangements. Moreover, its backlogs and new growth projects will likely support its growth and higher dividend payments. 

Pembina stock also looks attractive on the valuation front. Its price/earnings and EV/EBITDA multiple of 15.4 and 10.1 is lower than the pre-pandemic levels and compares favourably to the peer group average. Overall, its highly contracted cash flows, low valuation, and high yield make it a solid monthly paying dividend stock. 

AltaGas

AltaGas (TSX:ALA) is another top-quality TSX stock offering monthly payouts. Thanks to its solid utility and midstream assets, AltaGas generates strong cash flows and provides clear visibility over its future dividend hikes and payments. 

It’s worth noting that AltaGas’s dividends are backed by its low-risk utility assets. AltaGas’s utility assets generate predictable cash flows and benefit from continued rate growth and cost-saving initiatives and, in turn, support higher dividend payments. Looking ahead, AltaGas expects its rate base to have a CAGR of 8-10% through 2026, which will expand its high-quality earnings base and drive dividends higher. 

Further, continued strength in its midstream business and higher export volumes will support its overall revenues and earnings. AltaGas expects its global exports volumes to grow at a CAGR of 10% over the next four years, which is encouraging. 

Given its balanced portfolio of high-quality assets, rate base growth, and visibility over future earnings, AltaGas projects a 5-7% annual increase in its dividends over the next five years. Moreover, AltaGas offers a solid yield of 3.7%. 

NorthWest Healthcare Properties

NorthWest Healthcare Properties REIT (TSX:NWH.UN) is another monthly paying dividend stock that’s worth including in your portfolio. It is trading cheap and offers a solid yield of 5.8%. Notably, NorthWest Healthcare owns a defensive real estate asset portfolio that consistently generates solid cash flows. Further, its tenants are government backed. 

Looking ahead, I expect NorthWest Healthcare’s financials to benefit from the long lease expiry term, high occupancy rate, and inflation-indexed rents. Moreover, its focus on strategic acquisitions and balance sheet optimization augur well for future growth. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Sneha Nahata has no position in any of the stocks mentioned. The Motley Fool recommends ALTAGAS LTD., NORTHWEST HEALTHCARE PPTYS REIT UNITS, and PEMBINA PIPELINE CORPORATION.

More on Dividend Stocks

hand stacks coins
Dividend Stocks

3 Ultra-High-Yield Dividend Stocks You Can Buy and Hold for a Decade

These three high-yield dividend stocks still have some work to do, but each are in steady areas that are only…

Read more »

senior man and woman stretch their legs on yoga mats outside
Dividend Stocks

TFSA: 2 Canadian Stocks to Buy and Hold Forever

Here are 2 TFSA-worthy Canadian stocks. Which one is a good buy for your TFSA today?

Read more »

calculate and analyze stock
Dividend Stocks

This 5.5% Dividend Stock Pays Cash Every Single Month!

This REIT may offer monthly dividends, but don't forget about the potential returns in the growth industry its involved with.

Read more »

Silver coins fall into a piggy bank.
Dividend Stocks

How to Use Your TFSA to Earn up to $6,000 Per Year in Tax-Free Passive Income

A high return doesn't mean you have to make a high investment -- or a risky one -- especially with…

Read more »

path road success business
Dividend Stocks

2 High-Yield Dividend Stocks to Buy Hand Over Fist and 1 to Avoid

High yields are great and all, but only if returns come with them. And while two of these might, another…

Read more »

Man holds Canadian dollars in differing amounts
Dividend Stocks

This 7% Dividend Stock Pays Cash Every Month

A high dividend yield isn't everything. But when it pays out each month and offers this stability, it's worth considering!

Read more »

young people stare at smartphones
Dividend Stocks

GST/HST “Vacation”: Everything Canadians Need to Know

The GST/HST "vacation" is a little treat for the holidays, along with a $250 payment. What should you do with…

Read more »

Train cars pass over trestle bridge in the mountains
Dividend Stocks

Is CNR Stock a Buy, Sell, or Hold for 2025?

Can CNR stock continue its long-term outperformance into 2025 and beyond? Let's explore whether now is a good time to…

Read more »