1 Under-$10 Dividend Stock to Buy for Monthly Passive Income

Payday ringed on a calendar
Image source: Getty Images

Written by Sneha Nahata at The Motley Fool Canada

Investors looking to create a steady passive-income stream can rely on dividend-paying stocks. While equity remains volatile, stocks that have a long history of dividend payments and are backed by fundamentally strong businesses can be easily relied upon for earning worry-free income.

Thankfully, the TSX has several high-quality stocks that have consistently paid and raised dividends for a very long period. This makes them a compelling investment to earn regular passive income. However, I’ll focus here on a stock offering monthly payouts. But before I discuss the stock, investors must note that dividends are paid out of profits and are never guaranteed. This implies that one must focus on diversifying their portfolio and should not invest all their money in one or two stocks.

With this backdrop, let’s delve into a top Canadian dividend-paying stock that pays monthly cash. By investing in this stock, one can supplement the monthly income. Further, this stock trades incredibly cheap, under $10, providing an exceptional entry point.

One under-$10 dividend stock for monthly passive income

While several Canadian stocks pay dependable dividends, passive-income investors could consider investing in a REIT (real estate investment trust). REITS are important income investments, as they distribute most of their earnings via dividends. Moreover, within the REITs, NorthWest Healthcare Properties (TSX:NWH.UN) looks highly attractive near the current levels.

It offers a monthly dividend of $0.067 per share. This translates into a high yield of 12.5% (based on its closing price of $6.40 on August 24). Besides its lucrative yield, let’s look at factors that make this REIT a dependable passive-income stock.

Why is NorthWest Healthcare a reliable passive-income stock?

The REIT has a defensive portfolio of high-quality international healthcare real estate infrastructure. While its assets are geographically diversified across Canada, the U.S., Australia, Europe, and Brazil, it benefits from top-class tenants, including large hospital operators and healthcare practitioners. Moreover, these tenants are supported by direct or indirect government funding.

Thanks to its defensive healthcare-focused assets, NorthWest consistently generates solid cash flows, which supports its payouts.

Impressively, NorthWest Healthcare owns 231 properties, with a high occupancy level of about 96%. Further, the REIT sports a long average lease expiry term of close to 14 years. Overall, its high occupancy and long lease expiry term add stability and visibility to its future cash flows. In addition, about 83% of its leases are subject to indexation, enabling it to generate solid same-property net operating income.

NorthWest stock has corrected quite a lot on a year-to-date basis due to its elevated debt and higher interest expenses. Nonetheless, it focuses on reducing debt and has implemented a hedging program, enabling it to lower interest expenses.

Bottom line 

While NorthWest Healthcare is under pressure due to a temporary increase in debt, its high-quality portfolio, solid tenant base, and high occupancy rate augur well for future growth and dividend payouts.


Recent Price

Number of Shares


Total Payout


NorthWest Healthcare






The table above shows that an investment of $10K in NorthWest Healthcare stock near the current levels could help you buy about 1,562 shares, which will generate $104.65 in passive income per month.

The post 1 Under-$10 Dividend Stock to Buy for Monthly Passive Income appeared first on The Motley Fool Canada.

Should You Invest $1,000 In NorthWest Healthcare Properties?

Before you consider NorthWest Healthcare Properties, you'll want to hear this.

Our market-beating analyst team just revealed what they believe are the 5 best stocks for investors to buy in August 2023... and NorthWest Healthcare Properties wasn't on the list.

The online investing service they've run for nearly a decade, Motley Fool Stock Advisor Canada, is beating the TSX by 26 percentage points. And right now, they think there are 5 stocks that are better buys.

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

More reading

Fool contributor Sneha Nahata has no position in any of the stocks mentioned. The Motley Fool recommends NorthWest Healthcare Properties Real Estate Investment Trust. The Motley Fool has a disclosure policy.