Buy 650 Shares in This Top Dividend Stock for $100 Per Month in Passive Income

Stock market investing is not the same for everyone. While everyone investing in the market wants to enjoy success, their perception and approach to it can be different.

Where many allocate a ton of capital to high-growth stocks for rapid wealth growth, others buy and hold blue-chip stocks to grow their wealth over time. Then there are those who invest in the stock market to generate a passive income to supplement their active income streams.

The most savvy investors tend to combine various investment strategies to build well-balanced, self-directed portfolios. Dividend investing is an excellent approach to creating a passive-income stream. Most dividend stocks pay at a quarterly schedule. Then there are stocks that distribute payouts monthly to investors.

Today, we will look at a dividend-paying stock you can use to begin building a monthly dividend income portfolio for a sizeable monthly passive-income stream.

SmartCentres Real Estate Investment Trust

When investing in dividend stocks, you must be careful never to simply go with those offering high-yielding dividends. As attractive as high-yielding payouts might seem, the underlying company must be fundamentally strong enough to sustain those payouts. Fortunately, there is no shortage of solid, publicly traded businesses listed on the TSX.

SmartCentres REIT (TSX:SRU.UN) is one such stock you can consider. The real estate investment trust (REIT) boasts a $3.34 billion market capitalization. The trust’s portfolio primarily comprises integrated and residential properties diversified across 174 locations in communities nationwide. SmartCentres REIT also develops complete, connected, and mixed-use communities on its existing properties.

As of this writing, SmartCentres REIT trades for $23.08 per share, boasting an 8% annualized dividend yield. It pays out $0.1542 per unit to its investors every month. By accumulating enough shares of the REIT in your self-directed portfolio, you can create a sizeable passive-income stream.

SmartCentres owns real estate assets that can generate revenue across all market cycles. With 65% of its tenants providing essential services, 95% of them being national or regional retail brands, its income stream is rock solid.

The solid tenant base for the trust means its cash flows are reliable and plentiful. While it boasts an unusually high dividend yield, SmartCentres REIT is well equipped to keep paying its investors their monthly distributions reliably.

Foolish takeaway

By allocating money to monthly dividend stocks strategically, you can unlock a truly passive monthly income stream. Whether you use it to grow your account balance or help with monthly expenses is up to you.

Suppose you buy and hold the shares and reinvest dividends in a Tax-Free Savings Account (TFSA). In that case, your wealth can grow rapidly through the power of compounding. Since it will be in a tax-sheltered account, your wealth within the TFSA can grow without incurring taxes.

Here is a table to show how buying 650 shares of SmartCentres REIT can provide you with around $100 per month in passive income through dividends alone.