Buy 500 Shares of This Top Dividend Stock for $77/Month in Passive Income

A plant grows from coins.

So far, the economy has turned out to be more resilient than many would have expected in 2023. Moreover, easing inflation and expectations of less-aggressive interest rate hikes gave a significant boost to growth stocks. While the equity market has recovered from the lows, economic uncertainty poses challenges. However, investors seeking passive income shouldn’t worry much as the TSX has several fundamentally strong dividend-paying stocks that continue to pay regular dividends, regardless of the volatility in the market. 

For instance, stocks like Fortis and Enbridge continue to pay and increase their dividends irrespective of the economic situation. The well-protected payouts of these companies make them a top choice for passive-income seekers. While Fortis and Enbridge are undoubtedly great stocks to earn reliable income, I’ll focus on dividend-paying stock that offers monthly payouts. 

Buying 500 shares of this top dividend stock could enable investors to earn $77/month in passive income. 

Top dividend stock for monthly passive income

While there are several monthly-paying dividend stocks, one could consider investing in the shares of SmartCentres Real Estate Investment Trust (TSX:SRU.UN). It is Canada’s largest fully integrated REIT (real estate investment trust). It’s worth highlighting that REITs generally have very high payout ratios, making them ideal investments for passive-income investors. 

As for SmartCentres REIT, it sports a portfolio of 189 properties located across top communities in the country. Moreover, the company has 34.9 million square feet of income-producing retail and first-class office space. Further, with its SmartLiving expansion into residential, the company also focuses on building rental apartments, seniors’ residences, condos, and hotels.

SmartCentres REIT has a solid history of reliable cash distribution and a payout ratio of over 90%. It pays a monthly dividend of $0.154 a share, reflecting a compelling yield of 7.74% (based on its closing price of $23.90 on September 8).

Why is SmartCentres REIT a dependable stock to earn passive income?

The key to SmartCentres’s reliable payouts is its solid rental space, top-class tenants, and a high occupancy rate. The company’s properties are strategically located in the best communities. Moreover, its tenants are large corporations that provide essential services. For instance, it generates about 25% of its revenues from Walmart. Moreover, some of its other top tenants are Canadian Tire, Metro, and Dollarama. 

Thanks to its top-quality tenants and high occupancy rate of about 98%, SmartCentres generates solid same-property net operating income, which supports its payouts.

With the continued strength in its core recurring retail income, mixed-use development business, and high occupancy rate, SmartCentres REIT is well positioned to deliver strong financials, enabling it to enhance its shareholders’ returns through steady payouts. Moreover, the majority of the company’s debt is of fixed rate, making it relatively immune to the higher interest rate environment. 

Bottom line

SmartCentres is a dependable income stock. Meanwhile, the table below shows that if you buy 500 shares of SmartCentres REIT right now, you can earn $77 in passive income every month. To buy 500 shares of SmartCentres, one would have to invest about $11.95K.

CompanyRecent PriceNumber of SharesDividendTotal PayoutFrequency
SmartCentres REIT$23.9500$0.154$77Monthly
Price as of 09/08/23

While SmartCentres appears to be a solid passive-income stock, investors must note that dividend payouts are not guaranteed and could be reduced or stopped. Thus, investors must diversify their portfolios and invest their savings in different companies. 

The post Buy 500 Shares of This Top Dividend Stock for $77/Month in Passive Income appeared first on The Motley Fool Canada.

Should You Invest $1,000 In SmartCentres REIT?

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Our market-beating analyst team just revealed what they believe are the 5 best stocks for investors to buy in August 2023… and SmartCentres REIT wasn’t on the list.

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See the 5 Stocks
* Returns as of 8/16/23

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Fool contributor Sneha Nahata has no position in any of the stocks mentioned. The Motley Fool recommends Enbridge, Fortis, SmartCentres Real Estate Investment Trust, and Walmart. The Motley Fool has a disclosure policy.