2 Best Monthly Dividend Income Toronto Stock Exchange To Buy
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Payout frequency isn’t the first thing you see when looking for dividend-paying stocks that offer a high enough (and hopefully sustainable) return to help you kickstart significant passive income. This is because whether the distributions are monthly or quarterly, the same amount of money would flow to you. But monthly payments provide more convenience.
You don’t have to regulate / hide your money from quarterly payments to last the entire three months when the new payment comes in which requires decent financial discipline and a bit of budgeting. And if that is difficult for you to manage, it may be a good idea to look for dividend-paying stocks that offer the right combination of the two: frequency of payment and high return.
But it’s important to consider other positive and negative aspects and rely on fundamentals to guide your decision more than practical frequency.
An electricity production company
Toronto based Power of the North (TSX: NPI) mainly focuses on production green and clean energy. The company has a global portfolio of assets (although most of them are concentrated here in North America) that includes offshore and onshore wind farms, solar farms and efficient natural gas power plants. The company is primarily focused on its offshore wind asset class.
As well as having a green portfolio, which is pretty appealing for a stock you plan to own for the long term, the company also offers monthly dividends. It has only increased its dividends once since 2017. The 3% return may not seem like much if you look at the stock from a pure dividend perspective, but combine it with a compound annual growth rate. over 10 years by 15% and you have a pretty profitable operation on your hands.
If you invest around $ 50,000 in the business, it will net you around $ 125 per month in passive income. But what’s even more impressive is that if the stock maintains its growth rate, it can easily more than double your capital in less than a decade.
A mortgage company
More growth and less return may not be the combination you are looking for, and if you are looking for an asset that pays more dividends relative to the potential for capital growth, National financial first (TSX: FN) could be the stock to choose. The mortgage company currently offers a generous 5.1% return, which could increase if the stock continues to fall as it is now.
The company is a diversified mortgage lender. It offers mortgages to residential borrowers as well as commercial buyers / investors. It is one of the largest non-bank lenders in the country, which is both a good and a bad thing. This allows the company to tap into a rich source of cash flow, but it also gives the company too much exposure to potentially dangerous asset classes (for now at least) like the housing market. .
Ironically, many investors turn to REITs when looking for these two things – high returns and monthly frequency. And neither of the two stocks is a REIT. But both are dividend stocks that offer monthly payouts, and if you can keep them your TFSA, monthly dividend income would be fully tax exempt.