Best Monthly Canadian Dividend Stocks

Looking for monthly dividend income? To start with, don’t be fooled by all the monthly income products such as BMO Monthly Income Fund or TD Monthly Income Funds.

A lot of your money is spent on the MER (Management Expense Ratio) when you buy these products. You are already behind before you invest…

Monthly dividend stocks are your best bet for a solid and dependable monthly income with REITs as an alternative option but not without its risks.

Even then, not all monthly income stocks are equal. Many of those stocks were income trusts and have switched to corporations and continued with monthly dividend payments.

Complete List of Monthly Income Stocks

Before we jump into the best Canadian companies that pay a monthly dividend income, let’s review the full list. The best options available do not always mean they fit your portfolio.

When you look across the TSX, there aren’t many companies outside REITs that pay a monthly dividend. However, I did some of the leg work and below is a list of all the monthly dividend stocks tracked with the Dividend Snapshot Screener.

Best Monthly Dividend Stocks

Considering the limited options, I picked the top 5 stocks outside of REITs that can provide both stock appreciation and dividend growth.

As a rule of thumb, for monthly income, I am staying away from energy stocks as stability isn’t clear with the state of fossil fuel versus renewable energy. The first adjustment an energy company might do is switch to quaterly income once there are challenges.

1. Northland Power

NPI - Northland Power Northland Power is a power producer that develops, builds, owns, and operates clean and green power infrastructure assets in Canada, Europe, and other global markets.

As one of Canada's first independent power producers, Northland Power has global operating facilities generating over 2.6 GW of electricity, with an additional 130 MW of generating capacity under construction and 1,100+ MW in the project pipeline.

Northland has in-house development, plant design, financing, and operations capabilities. The company has a long track record of more than three decades in the business of producing electricity from natural gas and renewable energy sources. 

Key Investment Data

  • Ticker: TSE:NPI
  • Sector: Utilities
  • Industry: Utilities - Renewable
  • Market Cap: 8.64B
  • P/E: 44.10
  • Dividend Yield: 3.14%
  • Payout Ratio (TTM): 130.90%

2. TransAlta Renewables

RNW - TransAlta Renewable TransAlta Renewables is a renewable energy company and one of the largest generators of wind power in Canada. It is a sponsored vehicle of TransAlta Corporation. With more than a century’s experience under its belt, TransAlta Renewables has developed a rich experience of owning, operating, and maintaining a large fleet of power generation assets.

TransAlta Renewables owns and operates 21 wind farms, 13 hydroelectric facilities, seven natural gas plant, one solar facility and one natural gas pipeline in the US, Canada, and Australia. Highly contracted renewable and natural gas power generation assets, and long-term contracts with strong counterparties ensure stable cash flows for the company.

TransAlta Renewables owns renewable energy facilities across different regions and multiple technologies. The company owns directly or through economic interests more than 2,400 MW of net generating capacity and are strategically located to supply growing industrial regions.

Key Investment Data

  • Ticker: TSE:RNW
  • Sector: Utilities
  • Industry: Utilities - Renewable
  • Market Cap: 5.04B
  • P/E: 37.01
  • Dividend Yield: 4.98%
  • Payout Ratio (TTM): 183.80%

3. Shaw Communications

SJR.B - Shaw Communications Shaw Communications is a leading network company and one of the largest providers of residential communication services in Canada.

The company serves 3.2 million subscribers, including 1.9 million internet and more than one million Shaw home phone customers. It owns an extensive network of 860,000 kilometers long fiber network providing data networking, video, voice, and Internet services to companies of all sizes.

Shaw Communications has a presence in both wireline (80% of revenue) and wireless (20%) segments. The wireline division consists of consumer and business services. The wireless division provides wireless voice and data services through its mobile wireless network infrastructure.

Key Investment Data

  • Ticker: TSE:SJR.B
  • Sector: Communication Services
  • Industry: Telecommunication Services
  • Market Cap: 18.50B
  • P/E: 20.80
  • Dividend Yield: 3.20%
  • Payout Ratio (TTM): 67.10%

4. AltaGas

ALA - AltaGas AltaGas is a North American diversified energy infrastructure company. It engages in delivering affordable natural gas through regulated natural gas distribution utilities and transact more than 1.5 Bcf/d of natural gas. In addition, AltaGas provides storage facilities, interstate natural gas transportation, energy efficiency contracting and retail power marketing services.

The company operates through midstream, utilities and power segments. It serves 1.6 million customers in the utilities and owns infrastructure assets worth more than $21 billion in some of the fastest growing energy markets in North America. AltaGas’ assets include a good mix of gas, power, and utility assets.

Its midstream business serves customers primarily in the Western Canada Sedimentary Basin. AltaGas is known for its premier energy solutions, the strength of its assets and expertise along the energy value chain.

Key Investment Data

  • Ticker: TSE:ALA
  • Sector: Utilities
  • Industry: Utilities - Regulated Gas
  • Market Cap: 7.01B
  • P/E: 19.31
  • Dividend Yield: 4.00%
  • Payout Ratio (TTM): 75.80%

5. First National Financial

FN First National Financial Corporation First National Financial Corp is Canada’s largest non-bank mortgage lender. In the last thirty years of its business, the company has built a leading reputation in real estate financing with over $106 billion in Mortgages Under Administration and is the largest commercial mortgage lender in the country today.

More than 80% of the MUA is insured mortgages, followed by conventional style family residential mortgages (13%) and multi-unit residential and commercial mortgages (6%). It maintains diverse and flexible funding sources and is known for its prudent and conservative underwriting practices.

Size, large national presence and focus on mortgage financing are key differentiators for the company. The Canadian mortgage market is valued at over $1.1 trillion and given its leading reputation, First National is in a good position to benefit from this opportunity.

Key Investment Data

  • Ticker: TSE:FN
  • Sector: Financial Services
  • Industry: Mortgage Finance
  • Market Cap: 2.73B
  • P/E: 11.18
  • Dividend Yield: 5.17%
  • Payout Ratio (TTM): 64.80%

Build Your OWN Top List

My portfolio is generating over 12% annual returns since 2009. It's not from the beginning of the year or from 2019, it's from 2009 !!! That's a consistent return which means using the rule of 72, I double my portfolio every 6 years.

My approach is simple but you need key data that I have cultivated with the Dividend Snapshot Screeners. No other investment services provide you with easy to understand data but also actionable data. No hidden magic.

In fact, I have tried all of the investment services for dividend investors like a crash test dummy of investment services. Just ask me, and you'll learn why there was nothing I could use out there and build the Dividend Snapshot Screeners.

DISCLOSURE: Please note that I may have a position in one or many of the holdings listed. For a complete list of my holdings, please see my Dividend Portfolio.

DISCLAIMER: Please note that this blog post represents my opinion and not an advice/recommendation. I am not a financial adviser, I am not qualified to give financial advice. Before you buy any stocks/funds consult with a qualified financial planner. Make your investment decisions at your own risk – see my full disclaimer for more details.