Canadians have 11 primary sectors to choose from when picking stocks on the Toronto Stock Exchange. However, priorities differ from investor to investor depending on risk appetites and financial objectives. Growth investors chase capital gains or price appreciation, while dividend investors are passive-income seekers.
The benefit of dividend investing is that you transform your capital into regular, periodic income streams. Most companies pay quarterly dividends, but a select few pay monthly. The monthly payout frequency is more advantageous if you save for retirement or build a nest egg. Your money grows faster if you reinvest dividends 12 times a year, not four. The power of compounding is at work and your friend.
Boost regular income
Some retirees live off dividend income in the sunset years, although anyone can create additional income to boost regular or active income. Real estate investment trusts (REITs) trade like stocks and are excellent passive sources. Besides the monthly cash dividends, the dividend yields are high.
A low-priced, profitable option is NorthWest Healthcare Properties (TSX:NWH.UN). At $5.02 per share, the dividend offer is a mouth-watering 7.17%. Assuming you invest $10,000 today, the table below shows how much you’ll earn monthly without touching the principal.
| Company | Price | No. of Shares | Div Per Share* | Total Payout* | Frequency |
| North West REIT | $5.02 | 1,992 | $0.36 | $717.00 | Monthly |
Assume further the dividend yield remains and is constant. Your monthly income should increase as you accumulate more shares. Remember that the principal remains intact if you don’t sell the stock and draw only the dividends.
Only REIT in the cure sector
NorthWest Healthcare, the only Canadian real estate investment trust (REIT) in the cure sector, is a global real estate investor and asset manager. It owns and operates healthcare real estate infrastructure such as medical office buildings, hospitals, and healthcare facilities. A small segment (1%) of the total portfolio (200 properties) is in life sciences, research, and education.
The $1.24 billion REIT is present in eight countries. NorthWest’s primary goal is to renew and enhance healthcare infrastructure while delivering critical healthcare services and ensuring the highest standard of healthcare. The cure segment covers a lot of ground; the partners are hospital operators or healthcare practitioners. Some receive government funding, either directly or indirectly.
NorthWest enjoys a high 96.5% occupancy rate with a weighted average lease expiry (WALE) of 12.9 years. Management expects the strong demand for essential healthcare services and facilities to increase because of the aging populations and urban migration.
Complex landscape
In the first half of 2024, net property operating income fell 2.1% year over year to $189.4 million. Management attributes the decline to the complex landscape due to interest rate fluctuations and sector-specific challenges. However, the situation should improve as the easing cycle continues.
NorthWest Healthcare has never missed a monthly dividend payment since 2010. The yield could increase like before under a more favourable economic environment. Meanwhile, passive-income seekers can still feast on the above-market average dividend yield.