A 4.7% Dividend Stock That Pays Monthly Cash

An outperforming real estate stock paying an attractive yield is ideal for investors desiring monthly cash dividends.

| More on:
Retirees sip their morning coffee outside.

Source: Getty Images

Retirement residences and long-term care (LTC) homes were generally defensive investments until they took a big hit during the pandemic in 2020. Governments were unprepared for the deadly coronavirus, which sent shock waves globally. Canada’s senior housing market sector is still in post-pandemic recovery but into growth.

Chartwell Retirement Residences (TSX:CSH.UN), one of Canada’s largest senior housing operators, continues to generate investors’ interest, as evidenced by its stock performance. Thus far, in 2024, the real estate stock is up 14.6% year-to-date. However, in addition to the attractive 4.7% yield, the enticing factor is the monthly cash dividends. If you invest today, the share price is $13.10.

Strategic decision

After the first quarter of 2022, Chartwell announced its plan to sell its LTC platform in Ontario. Management said it was a strategic decision and that the company needed to focus more on the growing retirement business. LTC operations comprised less than 10% of the business.

In early September 2023, Chartwell completed the sale of the Ontario LTC homes to Age Care Health Services (16) and Axium (1) for a gross sale price of $445 million. The current senior living options are retirement communities in Alberta, British Columbia, Ontario, and Quebec.

The $3.6 billion unincorporated, open-ended real estate trust offers resident services and care services under its assisted living program in different settings.  After the LTC divestment, Chartwell’s key performance targets are occupancy, cash flow, employee engagement, and resident satisfaction.

Year of change

Vlad Volodarski, CEO of Chartwell, said 2023 was a year of change, learning, and growth. Management streamlined many corporate processes and invested in technology platforms for faster information sharing, decision-making, and improved focus.

The new technology enhanced business intelligence capabilities, and rolled out an electronic health records platform, an integrated recruitment system, and a workforce management tool. Chartwell wants to focus it operations in mid-market and upscale residences in urban and suburban areas.  

The 5% and 7% year-over-year increases in employee engagement and resident satisfaction scores were the first encouraging signs. In 2023, resident revenue increased nearly 4% year-over-year to $687.3 million, while net income jumped 158.5% to $128.3 million.

According to Volodarski, the senior housing sector benefitted from the favourable industry dynamics in 2023. He also expects favourable conditions to support occupancy and revenue growth this year. The occupancy rate rose to 84.9% from 77.5% in 2022.

In Q1 2024, total revenue increased 10.3% to $183.9 million from a year ago, while net loss improved 84.3% to $1.3 million versus Q1 2023. The occupancy rate increased to 86.1% due to strong demand fundamentals despite a historically weaker winter season.

Higher performance scores

Chartwell Retirement Residences now provides exceptional resident experiences in its upscale and mid-market residences in urban and suburban locations. Volodarski expects occupancy to hit 87.3% in June 2024 due to improved operating margins and cash flows in Q2 2024.

“In 2025, we will achieve in our retirement residences, employee engagement of 55% (highly engaged), resident satisfaction of 67% (very satisfied) and same-property occupancy of 95%,” he added. Notably, Chartwell hasn’t missed a monthly cash dividend payment since December 2003.

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 Christopher Liew has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

More on Dividend Stocks

a man relaxes with his feet on a pile of books
Dividend Stocks

CPP Pensioners: Watch for These Important Updates

The CPP is an excellent tool for retirees, but be sure to stay on top of important updates like these.

Read more »

Technology
Dividend Stocks

TFSA Investors: 3 Dividend Stocks I’d Buy and Hold Forever

These TSX dividend stocks are likely to help TFSA investors earn steady and growing passive income for decades.

Read more »

four people hold happy emoji masks
Dividend Stocks

Love Dividend Growth? Check Out These 2 Income-Boosting Stocks

National Bank of Canada (TSX:NA) and another Canadian dividend-growth stock are looking like a bargain going into December 2024.

Read more »

An investor uses a tablet
Dividend Stocks

A Dividend Giant I’d Buy Over Enbridge Stock Right Now

Enbridge stock may seem like the best of the best in terms of dividends, but honestly this one is far…

Read more »

how to save money
Dividend Stocks

Got $1,000? The 3 Best Canadian Stocks to Buy Right Now

If you're looking for some cash flow from your $1,000 investment, these are the ideal investments to make.

Read more »

TFSA (Tax-Free Savings Account) on wooden blocks and Canadian one hundred dollar bills.
Dividend Stocks

A Dividend Giant I’d Buy Over BCE Stock Right Now

Don't get sucked in by BCE's 10% dividend -- the stock is a total yield trap. Buy this instead.

Read more »

Retirees sip their morning coffee outside.
Dividend Stocks

Consider Sienna Senior Living for a Stable Monthly Income

Buying this Canadian dividend stock could help you build a dependable monthly income portfolio for the long term.

Read more »

Female raising hands enjoying vacation, standing on background of blue cloudless sky.
Dividend Stocks

Best Beginner-Friendly Stocks to Buy Now in Canada

These top TSX stocks have delivered attractive long-term returns.

Read more »