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5 Best Monthly Dividend Canada Stocks Worth Investing in 2023

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Are you looking to make passive income on the stock market in Canada? Dividend stocks are a fantastic way to generate income from the stock market. Additionally, there are dividend stocks in Canada that provide you with monthly dividend income.

Monthly dividend payments are valuable because you will be generating compounding returns each month. Therefore, your dividend payment will increase each month due to the monthly compounding.

What Are Monthly Dividend Stocks?

Dividend Stocks in Canada

Monthly dividend stocks are companies that pay dividends each month to investors. There are not many Canadian dividend stocks that pay monthly dividends. Many of these stocks are real estate investment trusts (REITs).

REITs should catch the attention of dividend investors because these companies must pay most of their taxable income as dividends.

Before investing in monthly dividend stocks, you must research what you believe is the best for your investment portfolio. If you choose the right companies, you can create passive income and benefit from stock appreciation.

How to Make Passive Income With Canadian Dividend Stocks

The goal for every dividend investor is to one day generate enough passive income from the stock market to retire. If you buy monthly dividend stocks consistently, you will generate passive monthly income and take advantage of compound growth.

Investing in monthly Canadian dividend stocks benefits significantly from using a dividend reinvestment plan (DRIP). DRIP investing is when your dividends are automatically reinvested back into more shares of stock. DRIP allows you to invest on autopilot since you don’t have to worry about reinvesting your cash dividends.

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Are Canadian Dividend Stocks a Good Investment?

Many Canadian companies generate stable cash flow for their investors. Most Canadian monthly dividend stocks are in the energy sector or are real estate investment trusts. REITs are great for producing stable cash flows for their investors since they must pay most of their income as dividends.

Canadian dividend stocks are generally good investments since they are not volatile and provide investors with consistent monthly dividend payouts. Ideally, you benefit from stock appreciation in addition to the dividend income.

You can benefit from the stock appreciation and monthly dividends if you buy dividend stocks that provide consistent dividend payouts and grow their revenue.

1- Granite REIT

  • Ticker Symbol: GRT-UN.TO
  • Dividend Yield: 4.23%

Since REITs are required to pay a large chunk of their taxable income as dividends, they are an attractive asset for dividend investors. Granite REIT is a Canadian-based real estate investment trust engaged in business with warehouses and industrial properties in Europe and North America.

Granite REIT has a portfolio of 139 investment properties to generate consistent cash flows and a high dividend yield of 4.23%. It looks to expand its company by focusing on proactive management, conservative capital ratios, and strong corporate governance.

2- Savaria Corporation

  • Ticker Symbol: SIS.TO
  • Dividend Yield: 3.64%

Savaria Corporation designs and builds products that help make life more accessible and improve mobility. Examples of this company’s products include elevators, stair lifts, and wheelchair lifts. Savaria is passionate about developing the best products to serve the older population’s needs.

Savaria Corporation has a low market cap of just $850m, making it one of the few small cap monthly dividend-paying stocks. However, on paper, Savaria Corporation is doing good, as its revenues are growing, and it has a P/E ratio of 44.


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3- Northland Power

  • Ticker Symbol: NPI.TO
  • Dividend Yield: 2.68%

Northland is a power producer that produces electricity utilizing renewable energy resources like solar, wind, and efficient natural gas. The company owns green global power infrastructure assets in Asia, Europe, Latin America, North America, and more.

Northland Power has a market cap of $10b. The stock may be a good choice for dividend investors since it has a P/E ratio of just 18 and a consistent monthly dividend. The company also has a dividend payout ratio of 49%, which allows room for capital appreciation.

4- Pembina Pipeline Corp

  • Ticker Symbol: PPL.TO
  • Dividend Yield: 5.44%

Pembina Pipeline owns pipelines and offers transportation services for the energy industry. The pipelines transport hydrocarbon liquids and natural gas products produced in Canada. The company ensures hydrocarbons produced in the basins where Pembina operates reach high-value global markets.

Pembine Pipelines has a market cap of $25b and generated nearly $2b in free cash flow in 2021. This cash flow allows the company to have a dividend payout ratio of 97% and a 5.44% dividend yield. In addition, the company’s P/E ratio is about 17, which is ideal for value investors looking to generate passive income.


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5- Freehold Royalties Ltd.

  • Ticker Symbol: FRU.TO
  • Dividend Yield: 7.74%

Freehold Royalties is an oil and gas royalty company with assets in Canada and the United States. The company seeks to acquire and manage royalties to provide investors with a low-risk income vehicle. Freehold’s land holdings total around 7 million gross acres between the United States and Canada.

Freehold Royalties has a market cap of about $2b and an attractive P/E ratio of just 12. The company produced free cash flows of $162m in 2021 and has maintained consistent revenue.

In addition, the company’s payout ratio is 68% and has a dividend yield of nearly 8%, making Freehold Royalties an excellent monthly dividend stock.

Canadian Dividend Investing: Bottom Line

You must research and invest in the best dividend stocks to employ a successful dividend investing strategy. The key factors to consider are the dividend yield and reliable cash flow. Cash flow is essential because monthly dividend stocks must produce a profit to pay their investors consistently.

Investing in monthly dividend stocks is one of the best ways to take advantage of compound growth and build wealth. Your portfolio will grow each month exponentially, all without having to check your account if you utilize a DRIP strategy.

In addition, if your broker allows, you can also use an automatic deposit to compound your returns even more.

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