2 Affordable Passive-Income Stocks That Pay Monthly

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Investors planning to start a passive-income stream could consider investing in shares of top-quality dividend-paying companies. Thankfully, the TSX has several reliable stocks like Fortis and Enbridge that have been consistently paying and growing their dividends for decades. This makes them a reliable investment to earn regular cash. 

However, let’s look beyond Fortis and Enbridge and focus on stocks that pay monthly cash and are trading cheap. With this backdrop, let’s look at two affordable Canadian stocks that pay monthly cash. 

Investors seeking monthly passive income could consider investing in REITs (real estate investment trusts). REITs have a high payout ratio as they are obligated to distribute most of their earnings. This makes them a compelling investment to earn monthly cash. One could consider investing in SmartCentres Real Estate Investment Trust (TSX:SRU.UN) within the REITs. 

The REIT is trading under $30, which makes it affordable. Moreover, it offers a lucrative yield of about 8.65% (based on its closing price of $21.39 on October 26).

Income investors can rely on SmartCentres’s high yield. SmartCentres is Canada’s largest fully integrated REIT that owns 34.9 million square feet of income-producing assets across the top communities in the country. Further, the REIT boasts a top-class tenant base and high occupancy rate, which add stability to its cash flows and enable the company to generate solid AFFO (adjusted funds from operations) to support its payouts. 

Investors should note that about 65% of its tenants provide essential services. Moreover, 95% of its tenants are large national or regional retailers. For instance, some of its top tenants include Walmart and Loblaw. These top-class retailers add stability to SmartCentres’s earnings base and are crucial to its consistently high occupancy rates. Notably, SmartCentres sports an industry-leading occupancy rate of about 98.2%. 

Overall, SmartCentres’s solid retail-focused real estate portfolio, development of mixed-use properties, high occupancy rate, and a strong balance sheet position it well to consistently grow its AFFO and return monthly cash to its shareholders. 

From REITs, let’s turn toward the restaurant industry. Income investors seeking monthly cash could consider investing in the shares of Pizza Pizza Royalty (TSX:PZA). The firm owns and franchises quick-service restaurants under the Pizza Pizza and Pizza73 brands.

Pizza Pizza Royalty predominantly generates its revenue through royalty income and strongly emphasizes returning cash to its shareholders via higher dividend disbursements. Notably, the company distributes all of its available cash to the shareholders after retaining reasonable reserves, making it a lucrative income stock. 

The company continues to drive traffic and benefits from an increase in menu pricing. This has allowed Pizza Pizza Royalty to grow its dividend significantly over the past year. Further, Pizza Pizza Royalty also focuses on expanding its traditional restaurant network, which augurs well for long-term growth. 

Trading under $20, Pizza Pizza Royalty stock offers an attractive yield of 6.84% (based on its closing price of $13.16 on October 26).

 

​Investors seeking monthly passive-income stream could rely on affordable stocks like SmartCentres Real Estate Investment Trust. Investors seeking monthly passive-income stream could rely on affordable stocks like SmartCentres Real Estate Investment Trust. 

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