If you want a reliable source of income that requires minimal effort, you must try investing in Canadian dividend stocks. Dividend investing has long been a popular strategy for those seeking to generate a steady stream of income, and it’s even more attractive when the dividends are paid out on a monthly basis. Many such quality TSX dividend stocks have seen sharp declines in recent months due to growing global economic concerns, making them look undervalued to buy now to hold for the long term.
In this article, I’ll talk about two affordable Canadian dividend stocks that not only offer attractive dividend yields but also distribute their dividend payouts every month.
Tamarack Valley Energy stock
After posting outstanding 251% gains in the previous two years, the shares of Tamarack Valley Energy (TSX:TVE) have seen nearly 30% value erosion in 2023 so far. With this, this Calgary-headquartered oil exploration and production firm currently has a market cap of $1.8 billion, as its stock trades at $3.13 per share, making it one of the cheapest monthly dividend stocks on the Toronto Stock Exchange right now. TVE stock offers a decent 4.8% annualized dividend yield at the current market price.
So far, crude oil prices have seen a sharp correction this year, as the dimming global economic outlook has raised short-term demand concerns. This was one of the key reasons why Tamarack Valley’s March quarter cash flow from operating activities tanked sharply on a YoY (year-over-year) basis, despite a strong double-digit increase in its quarterly oil, natural gas, and processing revenue. It explains why this monthly dividend stock has witnessed a selloff lately.
But I still remain optimistic about Tamarack’s long-term growth outlook as, in spite of short-term challenges, its focus remains on maximizing free funds flow generation and reducing debt. In addition, prices of energy products have the potential to recover sharply in the coming years due mainly to consistently growing global demand, which should also support a recovery in TVE share prices.
NorthWest Healthcare Properties REIT stock
NorthWest Healthcare Properties REIT (TSX:NWH.UN) could be another affordable Canadian monthly dividend stock to consider buying in 2023. This Toronto-headquartered REIT (real estate investment trust) operates a portfolio of quality healthcare-related properties primarily in the Americas, Australia, and Europe. It currently has a market cap of $1.9 billion, as its stock trades at $7.69 per share after losing about 19% of its value this year so far. At this market price, NorthWest Healthcare offers a very impressive 10.4% annual dividend yield.
In the first quarter of 2023, NorthWest Healthcare posted a 30% YoY increase in its revenue, while its quarterly net operating income jumped 25% from a year ago. Despite this positive growth, its adjusted funds flow from operations fell sharply due primarily to a high interest rate environment, a temporary increase in leverage, and lower transaction volume.
Despite these temporary factors affecting its financials in recent quarters, you can expect NorthWest stock to deliver strong returns in the long run as consistently growing demand for healthcare real estate globally looks promising with the potential to improve its financial growth trends.
