13 Best Monthly Dividend Stocks in Canada For Passive Income (2022)

When it comes to passive income, few assets come close to the comfort and consistency of dividends. They are reliable, relatively safer against market fluctuations, and typically offer higher returns than interests.

One thing that bugs me, and probably other dividend investors as well, is that most companies pay quarterly dividends.

So for some months, you might be getting a hefty amount, and for others, almost nothing. 

Thankfully, there is an easy solution: Monthly dividend stocks. And if you want to earn a consistent monthly income through dividends, you may find this list of some of the best monthly dividend stocks in Canada very useful. 

13 of The Best Monthly Dividend Stocks in Canada

Best Monthly Dividend Stocks in Canada Infographic

Note the following data is as of January 13, 2022:

1. Granite REIT Stock

Granite REIT Stock logo

Ticker: GRT.UN
Dividend Yield: 3.06%
Dividend Payout Ratio: 17.02%
Market Cap: $6.657 Billion

The first REIT, and spoiler alert, there are a lot of them on this list. A decent portion of REITs pays monthly dividends, making them perfect for investors looking for a predictable dividend income schedule.

Granite is also a dividend aristocrat, one of the oldest ones in the real estate sector, with nine consecutive years of dividend increases under its belt. It also happens to be one of the best growth stocks in the sector, so it will be a fine addition to your portfolio in terms of both dividends and stock growth.

The yield is also decent enough, and if you buy it at the right time, i.e., during a market crash or a real estate bubble burst, you might be able to lock in a juicy yield.

 The company has a globally diversified portfolio i.e., its properties are located in nine countries, but the distribution is not very even. Out of its 97 of its income-producing properties, 43 are in the US and 26 in Canada.

The rest are in Europe. What makes Granite a very decent investment, apart from its stellar dividend history and capital growth potential, is its asset class. The company owns and operates logistics properties, which, in this e-commerce-heavy economy, is a prized real estate class.  

2. Pembina Pipeline Stock

Pembina Pipeline Stock

Ticker: PPL
Dividend Yield: 6.42%
Dividend Payout Ratio: N/A
Market Cap: $22.174 billion

The energy sector is full of decent dividend stocks, but very few of them offer monthly dividends. Pembina, with its healthy yield, is one of them.

It’s one of the largest players in the energy sector and one of the safer ones. Most energy companies are tied up very tightly to oil prices and prospects. But pipeline stocks generate most of their revenues from long-term contracts.

So even if the oil prices are down, the income of companies like Pembina doesn’t suffer as much as exploration and refining-related companies. But it’s not completely immune to the market downturn, hence the high payout ratio. But the company has sustained its dividends through worst, and it’s likely to continue.

Plus, it’s an eight-year-old aristocrat, so it will most likely maintain its dividend growth streak and keep increasing its dividends for the foreseeable future. 

3. Parkland Fuel Stock

Parkland Fuel Stock logo

Ticker: PKI
Dividend Yield: 3.46%
Dividend Payout Ratio: 130.46%
Market Cap: $5.42 Billion

Dividend aristocrats that pay monthly dividends are relatively rare, but not completely unheard of, and Parkland is one of them. The company has been growing its dividends for seven consecutive years. The growth rate isn’t too powerful, but if the company is going through the trouble of only marginally increasing its payouts, the chances are that it wouldn’t slash its dividends.

The payout ratio currently seems dangerously high, but the company had seen worse and has grown its dividends even when the payout ratio grew over 300% in 2017. Parkland has a strong balance sheet, and it’s growing its revenues (year to year growth) at an incredible pace. 

Parkland is an independent fuel supplier and marketer. It has a network of retail fuel stations and convenience stores, which is most dense in the country and the US. It’s present in 25 countries, but the bulk of its revenues is generated here. 

The company has three principal operating divisions, i.e., retail, logistics, and marketing. This helps because it doesn’t have to rely quite heavily on third-party vendors, and it’s relatively self-sufficient. 

4. Killam Apartment REIT Stock

Killam Apartment REIT Stock

Ticker: KMP.UN
Dividend Yield: 3.07%
Dividend Payout Ratio: 28.66%
Market Cap: $2.498 Billion

Killam is another growth-oriented REIT, but it doesn’t grow its dividends. Still, the yield, monthly dividends, and a very safe payout ratio make it a good addition to any portfolio.

As the name implies, the bulk of Killam’s net operating income (89%) comes from apartment properties. The rest is divided between commercial and manufactured homes. 

The total portfolio is worth over $3.5 billion, including 16,701 apartments, 5,875 manufactured homes, and 0.7 million Sq. Ft. of commercial space. The portfolio is geographically concentrated in Halifax, New Brunswick, and Ontario. 

The safety of Killam’s monthly dividends comes from its continuously growing rental-based net income. The company focuses on developing and maintaining good-quality properties, and its very high occupancy rate suggests that it’s a good enough landlord.

Even if the dividends don’t grow, the company’s capital growth potential is powerful enough to cover for it. Between 2010-2020, its dividend-adjusted CAGR (compounded annual growth rate) has been 10.84%. 

5. Atrium Mortgage Stock

Atrium Mortgage Stock

Ticker: AI.TO
Dividend Yield: 6.33%
Dividend Payout Ratio: 92.78%
Market Cap: $607.365 million

Atrium’s ticker is truly a lost opportunity for artificial intelligence (AI) companies. But the company’s monthly payout frequency and a very generous yield makes it a perfect opportunity for dividend investors.

Both the stock appreciation and the company’s payout ratio have been very consistent. And even though it increased its market value over the years very slowly, the growth has been very steady.

The yield is sizeable enough to give you a monthly amount that rivals the average OAS pension if you invest $100,000 in the company. The company’s assets are almost double its liabilities, and its operating income is growing quite steadily. 

It’s a non-banker lender, which allows it to furnish loans/mortgages for properties and projects not covered by traditional lenders and banks. This also allows the company to charge a premium. By focusing on urban area properties, the company ensures that most of its money is tied up to desirable locations and properties.

6. TransAlta Renewables Stock

TransAlta Renewables Stock logo

Ticker: RNW
Dividend Yield: 5.74%
Dividend Payout Ratio: 167.85%
Market Cap: $4.556 Billion

TransAlta Renewables is another energy producer on this list. This one focuses more on hydroelectric power as well as gas, wind farms, and solar power. The company has 44 fully functional facilities in the country and a few in Australia, and long-term contracts. The contracts provide relative security to the company, and surety that someone would be buying the power they are producing.

It has 23 wind farms, one solar power facility, seven natural gas-based power plants, and 13 hydropower facilities. The diversified asset portfolio works in the company’s favor. The pace that it’s growing its wind power generation capabilities, chances are that it might divest off its natural gas before any sanctions.

Despite long-term contracts and sizeable revenue growth in the past five years, the company has been sporting a very high payout ratio for quite a while. One reason might be that the company invests a lot of money in acquiring new facilities and expanding its current facilities.

With a very decent yield and a futuristic approach towards energy production, TransAlta’s future seems safe, and with it, your dividends if you choose to add this company in your portfolio. However, it’s not a very consistent growth stock.

7.Cominar REIT Stock

  • Ticker: TSX:CUF.UN
  • Dividend Yield: 3.16%
  • Dividend Payout Ratio: N/A
  • Market Capitalization: $2.08 billion

Cominar is among the most significant diversified REITs in the country. The stock was one of the surprise top performers on the TSX among its peers in 2019. It calls itself the largest commercial property owner in the province of Quebec. 

The REIT has a portfolio comprising of more than 330 retail, office, industrial, and mixed-use properties. The company’s pursuit of stability resulted in its fantastic results as its occupancy rate increased, and the REIT managed to increase its average net rent. The REIT’s restructuring efforts have made it an attractive option to consider.

8. First National Financial Stock

First National Financial Stock

Ticker: FN
Dividend Yield: 5.34%
Dividend Payout Ratio: 60.05%
Market Cap: $2.638 Billion

Though a mortgage company doesn’t seem like a very wise investment, especially if you think that the real estate bubble will burst sometime in the future, but First National is an exception. It’s an eight-year-old aristocrat with a very juicy yield and a reasonable payout ratio despite what the real estate sector went through in 2020. 

At around a 5% yield, this is enough to get you around $42 a month in dividends if you invest $10,000 in the company. And since it’s a dividend aristocrat, that amount will increase every month (albeit at a modest pace). The company also pays special dividends, though not during the lean years. 

The company hasn’t grown its market value very steadily in the past, but it does have capital growth potential. Unlike many other companies on this list, First National is quite exposed to market downturns and recession, but it hasn’t stopped it from dishing outs dividends every month, not yet at least.

9. Exchange Income Fund Stock

Exchange Income Corporation-Exchange Income Corporation Reports

Ticker: EIF
Dividend Yield: 5.25%
Dividend Payout Ratio: 145.22%
Market Cap: $1.646 Billion

Exchange Income Fund is a powerful dividend aristocrat, with a history of increasing dividends for nine consecutive years. 2020 has been a rough year for the company because of the industry it’s in, i.e., air travel.

Despite having a very diversified portfolio of underlying businesses that includes material companies, manufacturing plants, regional air services, custom helicopters, and a flight college, the company saw its stock go down by over 68% in the 2020 crash.

That also drove the yield up. And even though the payout ratio seems dangerously high, the company has kept growing its dividends through the worst payout ratios.

It was never a very decent growth stock, to begin with, and might take a lot of time to recover, but the dividends are likely to continue and grow. The balance sheet is strong, and once the company takes off from the slump it’s trapped in, the payout ratio would come under control as well.

10. Northland Power Stock

Northland Power Stock logo

Ticker: NPI
Dividend Yield: 3.38%
Dividend Payout Ratio: 315.79%
Market Cap: $8.08 Billion

Northland Power has a modest yield and in recent years the payout ratio has greatly increased.

Even though Northland Power isn’t a dividend aristocrat, its payouts can be considered very safe and dependable, thanks to the nature of its business. In the last five years, the company has only increased its dividends once. 

It’s a power producer that focuses on clean and green energy and has considerable power-generating assets.

The company owns assets of about $11.5 billion, and they are capable of producing 2.68 GW of energy. Energy sources include offshore wind, thermal, onshore wind, and solar, with the first two making up about 80% of the company’s total power generation capacity.

The company has a “balanced” balance sheet, nothing too strong. Most of its facilities are concentrated in North America, with a few offshore wind farms near Europe and Taiwan. Geographic diversification isn’t extensive, but a presence in those markets might allow the company to expand further. 

11. Timbercreek Financial Stock

Timbercreek Financial Stock

Ticker: TF
Dividend Yield: 7.15%
Dividend Payout Ratio: 150%
Market Cap: $786.936 million

Timbercreek is another non-bank lender, but it specializes in commercial properties – an industry that’s both highly profitable or a loss-magnet, depending on the asset you are investing in.

It offers mortgages to multifamily properties, office, and retail properties, primarily in urban markets across the country. More than half the mortgage loans are tied to multifamily properties.

The balance sheet is in good shape. The yield itself is reason enough to buy into the stock. It’s natural to be apprehensive because of the payout ratio, but understand that it is associated with the fair value evaluation of the underlying properties.

The company doesn’t offer much capital growth, but the stock price usually stays steady. The dividends seem safe enough for now, and many people would have to default on their mortgages for dividends to be in serious danger. 

12. SmartCentres REIT Stock

SmartCentres REIT Stock

Ticker: SRU.UN
Dividend Yield: 5.83%
Dividend Payout Ratio: 97.75%
Market Cap: $5.398 billion

If you have ever shopped in a Walmart, the chances are that you’ve stepped foot in one of SmartCenters properties. About one-fourth of the Walmarts in the country are on SmartCentres properties.

This REIT focuses primarily on retail properties and has about 166 assets throughout the country. The total worth of SmaertCentres assets is $10.4 billion, and it spread around 34.2 million Sq. Ft.

The company has a powerful liquidity position and a robust balance sheet. Despite retail properties suffering some of the worst of what the pandemic had to offer, SmartCentres maintained a very high occupancy rate of 97.8%. The bulk of its tenants are well-known names like Walmart, Loblaws, Shoppers Drugs Mart, etc.

It’s not a very good growth stock, but the yield is reason enough to buy this aristocrat. Its dividend growth rate is also pretty decent. At its current rate, the company will pay off whatever you invest in it, in less than 12 years. 

13. RioCan REIT Stock

RioCan REIT Stock

Ticker: REI.UN
Dividend Yield: 4.20%
Dividend Payout Ratio: 75%
Market Cap: $7.255 billion

Closing the list is another REIT that’s offering a yield just shy of double digits. It’s one of the largest REITs in the country and focuses on retail and mixed-use properties in major urban hubs around the country.

This Toronto-based REIT has a portfolio of 221 properties, covering an area of 38.6 Sq. Ft. Over 90% of the portfolio comprises of retail properties, and the total asset value is over $15 billion.

The geographical distribution is concentrated mostly in Toronto, where about 52% of the locations are based in.

And though retail space suffered quite a bit during the pandemic, the company didn’t suffer as badly as it could, because a major portion of its retail portfolio is anchored by the grocery business.

The yield is high enough that even if you invest just one year’s total TFSA contributions ($6,000) in the company, you will get a decent return every month. 

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If you create an equally weighted portfolio out of these 13 stocks, you will get an average yield of about 6%. This is enough to start a sizeable passive income (if you can invest a hefty amount) that you can rely on every month. 

Thanks to a few dividend aristocrats in the mix, the income increase should hopefully provide you with a nice sum that will hit your investment account every month. 

Best Monthly Dividend Stocks in Canada

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Author Bio - Christopher Liew is a CFA Charterholder with 11 years of finance experience and the creator of Wealthawesome.com. Read about how he quit his 6-figure salary career to travel the world here.

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