Three Top TSX Passive-Income Stocks That Provide Monthly Payouts

2 min read | December 04, 2023 12:00 AM EST | By Team Kalkine Media

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The current market scenario, with higher interest rates affecting stock valuations, presents a favorable opportunity for investors seeking passive income. Here are some top TSX dividend stocks that offer consistent cash payouts:

Exchange Income Corporation (TSX: EIF):
- Business Profile: Diversified portfolio in aviation and industrial manufacturing industries.
- Dividend Yield: Nearly 5.8%.
- Dividend Consistency: Monthly dividends maintained or increased since its inception in 2004.
- Recent Performance: The stock is considered undervalued, with analysts estimating a discount of about 27%. It outperformed the Canadian stock market benchmark over various time frames.
CT REIT (TSX: CRT.UN):
- Business Profile: Canadian real estate investment trust with Canadian Tire as its key tenant.
- Dividend Yield: Attractive 6.6%.
- Fundamentals: Maintains high occupancy rate of over 99%. Defensive fundamentals with net operating income and funds from operations growth.
- Credit Ratings: Both CT REIT and Canadian Tire hold investment-grade S&P credit ratings of BBB.
Dream Industrial REIT (TSX: DIR.UN):
- Business Profile: Industrial real estate portfolio with assets in Canada, Europe, and the United States.
- Dividend Yield: 6%.
- Occupancy Rate: Approximately 97%.
- Valuation: Analysts believe the stock is discounted by about 22%.

Considerations for Canadian REIT Distributions:

Tax Implications: Canadian REITs pay cash distributions, and the return-of-capital portion reduces the cost base in non-registered accounts.
Tax Treatment: Other income, capital gains, and foreign non-business income may be part of REIT distributions, each with its tax treatment.
Tax-Advantaged Accounts: Holding REIT units in tax-advantaged accounts such as TFSA, RRSP, RDSP, RESP, or First Home Savings Account can simplify tax considerations.

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