Best Monthly Canadian Dividend Stocks: Build Passive Income

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Dividend Earner

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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 the list of Canadian monthly dividend paying stocks tracked with the Dividend Snapshot Screener.

As a side note, as the companies mature, many move to quarterly dividend. If you want monthly income from large corporation, you can look into the best dividend ETFs to generate income in the range of 4% to 6%.

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. The best REITs require a different analysis.

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.

Note that to screen stocks for income require unique dividend data. Not many screeners focus on dividend data and dividend stength. You should consider a screener such as Dividend Snaspshot Screeners.

1. Pembina Pipeline

Pembina Pipeline is a leading midstream and transportation service provider in North America. The company is known for providing safe and cost-effective transportation solutions since the last six decades.

The company offers a wide range of midstream and marketing services to the energy sector. It owns an extensive network of pipelines that transport crude oil, natural gas and natural gas liquids produced primarily in western Canada.

Pembina owns a large asset base consisting of pipelines and facilities, which is difficult for newcomers to replicate. As a leading energy infrastructure company, Pembina serves multiple basins and markets throughout Canada and the US. Pembina owns and operates an 18,000 km pipelines with a total capacity of 3 million barrels of oil equivalent per day.

Key Investment Data

  • Ticker: TSE:PPL
  • Sector: Energy
  • Industry: Oil & Gas Midstream
  • Market Cap: 22.95B
  • Market Cap Group: Large Cap
  • P/E: 8.66
  • Dividend Yield: 6.39%

2. Savaria Corporation

Savaria is one of the global leaders in the accessibility industry. The company manufactures products that help people maintain their personal mobility.

Its large product portfolio includes home elevators, commercial lifts, stairlifts, ceiling lifts and adapted vehicles. Savaria also offers medical beds and therapeutic surfaces. The company has manufacturing facilities in North America, Europe and China. It operates a sales network of dealers worldwide.

The company manages its operations under three reportable segments, Accessibility (accounting for more than 70% of total six months’ revenue in 2020), Patient Handling (24%) and Adapted Vehicles (~5%). By region, the US is the largest and accounted for ~58% of total six-months’ revenue, followed by Canada (22%), the EU region (15%) and others (4%).

Key Investment Data

  • Ticker: TSE:sis
  • Sector: Industrials
  • Industry: Specialty Industrial Machinery
  • Market Cap: 0.92B
  • Market Cap Group: Small Cap
  • P/E: 25.12
  • Dividend Yield: 3.65%

3. Exchange Income Fund

Exchange Income Corporation is a diversified, acquisition-oriented corporation. It owns a group of companies in the aviation and manufacturing sectors, and enjoys a diversified stream of income from businesses ranging from medevac transportation services, aftermarket aviation parts, to communication tower construction, high pressure water cleaning systems, and precision metal manufacturing, and more.

Exchange Income offers a wide range of operations within the aerospace and aviation industries including providing scheduled airline, charter service, and emergency medical service to communities located across different regions.

The principal operating subsidiaries of the Corporation are Bearskin Lake Air Service, Calm Air International, Custom Helicopters, Keewatin Air, Perimeter Aviation, Provincial Aerospace, Regional One, Quest Window Systems, etc. Its Provincial subsidiary is a global leader in maritime surveillance servicing governments around the world. Exchange Income operates through Aerospace & Aviation (Legacy Airlines, Regional One, and Provincial) and Manufacturing segments.

Key Investment Data

  • Ticker: TSE:EIF
  • Sector: Industrials
  • Industry: Airlines
  • Market Cap: 2.18B
  • Market Cap Group: Mid Cap
  • P/E: 17.54
  • Dividend Yield: 5.38%

4. Keyera Corp

Keyera Corp. is one of the largest independent midstream energy companies with extensive interconnected assets across Canada. The company caters to the needs of oil and gas producers in the Western Canada Sedimentary Basin, and provides NGL gathering and processing, fractionation, storage, transportation, logistics and marketing services.

Keyera’s core infrastructure is strategically located in key producing areas of Western Canada Sedimentary basin and Edmonton/ Fort Saskatchewan energy hub. The company also markets iso-octane, propane, butane, condensate and crude oil to customers in Canada and the United States.

It operates through Gathering and Processing, Liquids Infrastructure and Marketing segments. Keyera has strong expertise in operating complex energy processing facilities and provides a full range of essential midstream services to its customers.

Key Investment Data

  • Ticker: TSE:KEY
  • Sector: Energy
  • Industry: Oil & Gas Midstream
  • Market Cap: 7.53B
  • Market Cap Group: Mid Cap
  • P/E: 22.15
  • Dividend Yield: 6.08%

5. Whitecap Resources

Whitecap Resources Inc. is an oil-weighted growth company. It is a clean Canadian energy company focusing on the acquisition, development, and production of oil and natural gas assets in Western Canada.

The company has a low decline light oil asset base and 2,895 drilling locations in British Columbia, Alberta, and Saskatchewan. It is the active seller and shipper on six oil feeder pipelines connected to Enbridge mainline.

Whitecap Resources has a presence in West Central Alberta, Northwest Alberta and British Columbia, Southeast Saskatchewan, West Central Saskatchewan, and Southwest Saskatchewan.

Key Investment Data

  • Ticker: TSE:wcp
  • Sector: Energy
  • Industry: Oil & Gas E&P
  • Market Cap: 7.04B
  • Market Cap Group: Mid Cap
  • P/E: 6.59
  • Dividend Yield: 4.99%