When it comes to dividend stocks, monthly income can be a top way to earn income even if the market is volatile. If you’re looking for a reliable dividend stock to add to your portfolio for long-term monthly passive income, Extendicare (TSX:EXE) is one to seriously consider. With a solid history in the healthcare industry, particularly in senior care, Extendicare offers both stability and consistent payouts. This reliability makes it a standout choice for passive income investors.
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Into earnings
The dividend stock’s recent earnings report for Q2 2024 highlighted robust performance, with revenue growing by 13.3% year over year. Net income also skyrocketed by an impressive 1,227%, thus signalling management’s success in navigating a post-pandemic recovery while maintaining strong cost control measures. Return on equity sits at a stunning 60%, indicating the company’s ability to turn investments into profits efficiently. This is a great sign for long-term investors.
However, the stock is down from its 52-week highs, with a 200-day moving average of $7.69. While this may seem concerning at first, it’s important to recognize that much of the decline can be attributed to broader market volatility, especially in healthcare sectors impacted by inflation and rising labour costs. Management has been proactive, focusing on increasing efficiency and exploring new growth areas like home health care, which should mitigate the risks over time.
One of Extendicare’s key strategies has been a shift toward expanding its home healthcare services. This is becoming increasingly popular as more seniors prefer aging at home. The focus not only taps into a growing market but also positions the company for continued revenue growth. This pivot also reduces the company’s reliance on traditional long-term care facilities, which have seen more challenges post-pandemic.
What you get now
Looking ahead, the dividend stock is expected to maintain its consistent dividend payouts. All thanks to a stable revenue stream and a commitment to returning value to shareholders. Management continues to invest in technology and expand services. So there’s potential for revenue to keep growing at a healthy pace. These moves suggest that Extendicare is building a resilient business model that can weather short-term headwinds.
Meanwhile, the dividend stock has been delivering monthly dividends at an annual rate of $0.48, yielding around 5.14%. This makes it appealing for those looking to maximize cash flow without waiting for quarterly payouts. The dividend stock’s long-standing business in senior living and home healthcare services has been bolstered by a growing demand for these services, especially with Canada’s aging population, setting up a promising future for the stock.
For investors seeking a steady income stream with a focus on the long term, Extendicare offers the best of both worlds. Its current dividend yield is attractive, and its proactive approach to growth and efficiency puts it in a strong position for the future. While it’s not without risks, such as labour cost pressures, the dividend stock’s strong financials and management strategy provide confidence.
Bottom line
All considered, Extendicare is a top pick for those seeking monthly passive income from dividends. Its attractive yield, coupled with sound management and a promising future, make it a standout option in the healthcare sector. In fact, $7,000 could create immense passive income from dividends and should shares climb back to all-time highs.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | INVESTMENT |
| EXE – now | $9.35 | 749 | $0.48 | $359.52 | monthly | $7,000 |
| EXE – highs | $10.35 | 749 | $0.48 | $359.52 | monthly | $7,752.15 |
Now you have $359.52 in dividends and $752.15 in returns for $1,111.67 in passive income! With the company’s commitment to growth and efficiency, this stock could offer both reliable income and potential capital appreciation for long-term investors.
