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The Canadian stock market recently hit all-time highs, fueled by optimism surrounding potential interest rate cuts by the Bank of Canada. However, if the central bank opts to maintain elevated interest rates due to ongoing inflationary pressures, the market could experience further selloffs in the near future.
In such a volatile market climate, investors may seek ways to secure their financial future by mitigating risks to their investment portfolios. One effective strategy could involve investing in monthly dividend stocks, which offer steady and reliable income. Monthly dividend stocks are particularly beneficial for investors seeking to capitalize on compounding, as they allow for more frequent reinvestment of dividends, thereby accelerating wealth growth.
In this article, I'll spotlight two top Canadian monthly dividend stocks worth considering for long-term investment in 2024.
Exchange Income stock
Exchange Income (TSX:EIF), headquartered in Winnipeg, focuses on strategic acquisitions in manufacturing, aerospace, and aviation sectors. With a market cap of $2.2 billion and a share price of $46.66 (with 3.5% year-to-date gains), EIF stock offers an attractive annualized dividend yield of 5.7%. The company distributes dividend payouts monthly.
Exchange Income has doubled its annual revenue over the past five years, rising from approximately $1.2 billion in 2018 to $2.5 billion in 2023, driven by its commitment to value acquisitions. Supported by a prudent acquisition strategy and a solid balance sheet, the company is well-positioned for future growth. Consequently, I anticipate appreciation in EIF stock value over the long term.
Boardwalk REIT stock
Boardwalk REIT (TSX:BEI.UN) is a Calgary-based real estate investment trust that owns and operates a robust portfolio of multifamily rental communities across Canada, encompassing 29 million net rentable square feet. With a market capitalization of $3.6 billion and a share price of $72.52 (up 25.5% in the past year), Boardwalk REIT pays monthly dividends of $0.12 per share, amounting to $1.44 per share annually.
Although Boardwalk REIT's annualized dividend yield of approximately 2% may not seem compelling to some investors, its promising long-term growth prospects suggest potential for future dividend increases. Despite facing challenges such as the pandemic and macroeconomic headwinds, the REIT has achieved a 26% increase in total revenue over the past five years, reaching $545.7 million in 2023. Last year, it recorded a robust 15% year-over-year growth in annual funds from operations, alongside an operating margin expansion to around 61%. With a strong financial position, effective execution, and focus on cost containment, Boardwalk REIT presents a bright growth outlook.
