Yahoo Finance Earn $200/Month With These 3 Monthly Paying Dividend Stocks
Written by Rajiv Nanjapla at The Motley Fool Canada
After falling 3.7% in September, the S&P/500 Composite Index continues to be under pressure this month, after falling 0.4%. The fears that the Federal Reserve could raise interest rates amid sticky inflation has weighed on the equity markets. Last week, the Bureau of Labor Statistics announced that inflation in October rose by 3.7% year over year, which was higher than analysts’ expectations of 3.6%.
Meanwhile, the Federal Reserve has recently stated that the restrictive policy will stay until inflation falls closer to its guidance of 2%. So, the concerns that the tighter monetary policy could hurt growth have weighed on equity markets. Given the uncertain outlook, investors could look to earn a stable passive income by buying the following three top monthly paying dividend stocks. The secondary income could also help investors mitigate some of the impacts of price rises. Let’s look at these three stocks in detail.
Pizza Pizza Royalty
Pizza Pizza Royalty (TSX:PZA) is a top dividend stock for income-seeking investors due to its stable cash flows and high yield. The company operates a highly franchised business, collecting royalties from its franchisees based on their sales. So, inflation will not hurt its margins. Instead, rising menu prices due to increased commodity prices and wage inflation could boost its royalty pool sales, driving its financials. Supported by solid financials, the company has raised its monthly dividend seven times since April 2020. With a monthly dividend of $0.075/share, its forward yield is a juicy 6.78%.
Meanwhile, the company focuses on menu innovation and promotional activities to drive sales. Besides, its expansion plans to increase its restaurant count by 3-4% this year could also boost its financials. So, the company is well-positioned to continue rewarding its shareholders with healthier dividend yields.
Extendicare
Another high-yielding monthly paying dividend stock would be Extendicare (TSX:EXE), which offers care and services to Canadian seniors. Last month, the company announced the formation of a joint venture with Axium Infrastructure. The joint venture will acquire Extendicare’s four Class C redevelopment projects, with an aggregate of 960 LTC (long-term care) beds, for $147.3 million. Earlier in August, the company acquired 56 LTC homes from Revera, adding 7,000 beds to its portfolio.
These transactions reflect the company’s focus on the less capital-intensive, higher-margin business model. It could also boost its growth in the LTC and home healthcare segments. Besides, the company’s operating metrics are improving, with the average daily volume of its home healthcare segment increasing by 4.1% in the June-ending quarter. Also, its LTC occupancy rate expanded by 60 basis points. Considering all these factors, I believe Extendicare’s future payouts to be safe. With a monthly dividend of $0.04/share, its forward yield is a juicy 7.87%, making it an attractive buy.
Whitecap Resources
Amid the strengthening of oil prices, I have picked Whitecap Resources (TSX:WCP). On Friday, oil prices rose over 5% amid fears that the escalating Israel-Palestine war could impact oil production in the region. Higher oil prices could benefit oil-producing companies, including Whitecap Resources. Meanwhile, the company is investing around $900–$950 million this year, strengthening its production capabilities. So, it has provided optimistic production guidance for this year, with the midpoint representing year-over-year growth of 9%.
Further, management also hopes to increase its production to 200,000 barrels of oil equivalent per day by 2027, at an annualized organic growth of 5%. Given its growth initiatives and favourable environment, I believe WCP’s future payouts are safer. Amid falling debt levels, the company has announced an increase in its monthly dividends to $0.0608/share, effective from this month. Meanwhile, the company trades at 1.9 times its projected sales for the next four quarters, making it an attractive buy at these levels.
COMPANY | RECENT PRICE | NUMBER OF SHARES | INVESTMENT | DIVIDEND | TOTAL PAYOUT | FREQUENCY |
PZA | $13.28 | 903 | $11992 | $0.075 | $67.70 | Monthly |
EXE | $6.10 | 1967 | $11999 | $0.04 | $65.80 | Monthly |
WCP | $11.09 | 1082 | $11999 | $0.0608 | $78.70 | Monthly |
Total | $212.20 |
Investors takeaway
Considering their high dividend yields and healthy cash flows, these three monthly paying dividend stocks look like excellent buys for income-seeking investors. If an investor invests around $12,000 in each of the above three stocks, he can earn a stable passive income of over $200 monthly.
The post Earn $200/Month With These 3 Monthly Paying Dividend Stocks appeared first on The Motley Fool Canada.
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Fool contributor Rajiv Nanjapla has no position in any of the stocks mentioned. The Motley Fool recommends Whitecap Resources. The Motley Fool has a disclosure policy.
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