A prolonged high-inflation rate environment has created deeper holes in consumers’ pockets. However, one can shield themselves from the impact by earning a stable passive income. Investing in monthly-paying dividend stocks is one of the convenient ways to earn a stable passive income. Meanwhile, here are my three top picks.
NorthWest Healthcare Properties REIT
NorhtWest Healthcare Properties REIT (TSX:NWH.UN) owns, manages, and develops healthcare properties across seven countries. As of March 31, the company had a stake in 210 income-producing properties, with a total leasable area of 17.4 million square feet. The company has put in place long-term lease agreements with its tenants, with a weighted average lease expiry of 13.2 years. Meanwhile, the company continues to witness high occupancy and collection rates.
Further, NWH has strengthened its financial position by selling 27 properties over the last four quarters. The asset sales generated $696 million, which the company used to repay high-interest-bearing debt. Given its healthy operating metrics and the strengthening of its balance sheet, I believe NWH’s future dividend payouts are safe. With a monthly dividend payout of $0.03/share, its annualized payout stands at $0.36/share, while its forward yield is at 7.56%. It trades at a price-to-book multiple of 0.6, making it an attractive buy.
Extendicare
Extendicare (TSX:EXE) is another monthly-paying dividend stock that I am bullish on due to its improving operating metrics and strengthening balance sheet. During the March-ending quarter, the company’s top line grew by 13.1% amid improved occupancy and increased funding for its long-term-care (LTC) segment, volume growth of its home health care, rate increases, and growth in managed services.
Meanwhile, Extendicare is redeveloping five LTC projects of 1,280 beds with Axium, which would replace its existing 1,121 beds. Further, the company is progressing with 15 redevelopment projects in Ontario, including 3,032 beds that would replace 2,211 beds. Along with these growth initiatives, the increased rates could boost its financials in the coming quarters. The company has also strengthened its balance sheet by divesting its 256-bed LTC redevelopment project t in Orleans, Ontario, and assets of a former Class C LTC home in Sudbury.
Considering all these factors, I believe Extendicare is well-positioned to continue rewarding its shareholders by consistently paying dividends at a healthy rate. It currently pays a monthly dividend of $0.04/share, with its forward yield at 7.34%.
SmartCentres Real Estate Investment Trust
Another top monthly-paying dividend stock that should be under your radar would be SmartCentres Real Estate Investment Trust (TSX:SRU.UN). The company owns and operates 193 properties, with 35.1 million square feet of income-producing retail and first-class office properties. Given its strategically located properties and blue-chip customer base, the REIT enjoys a healthy occupancy and collection rate of 98% and 99%, respectively.
Further, SmartCentres REIT has a solid pipeline with 56 million square feet of mixed-use development permissions. These developmental projects could continue to expand its portfolio in the coming years, thus boosting its financials. These growth initiatives and solid underlying businesses are well-equipped to support its future dividend payouts. It currently pays a monthly dividend of $0.1542/share, with an annualized payout of $1.85/share and a forward dividend yield of 8.46%.
