Canadian Monthly Dividend Stocks for April 2015

Dividend stocks are attractive because they pay an income no matter what the market is doing. It’s true that some dividend stocks cut their dividends in harsh times. So, having a diversified portfolio of high quality dividend stocks will mitigate the risk of dividend cuts, and dividends received from the portfolio as a whole could even increase every year.

The index fund, iShares S&P/TSX 60 Index Fund (TSE:XIU) pays out a yield of 2.6%. Here are some monthly dividend stocks that you can consider. They pay 73% to 150% more than the index fund, respectively.

Vermilion Energy is the Best Amongst its Peers

Vermilion-Energy-logo

When thinking of Energy companies, companies like Suncor Energy, Enbridge, TransCanada, and Canadian Natural Resources come to mind. However, smaller mid cap companies can provide higher growth potential than large cap companies, and at the same time, are more established and stable than small cap companies.

Vermilion Energy Inc. (TSX:VET)(NYSE:VET) is a mid core energy company that is the best of its kind. Essentially, it is a blended play of value and growth. Vermilion Energy is diversified globally with leading positions in high netback businesses in North America, Europe, and Australia.

Vermilion Energy started investing in the Corrib natural gas project in Ireland since 2009. Finally, the capital expenditure spent will start paying off, as the project comes online in mid 2015. It will add to the company’s overall production growth as well as its cash flow.

Since 2003, Vermilion Energy has paid a reliable dividend, not having to cut it once. It yields 4.5%, and pays out a monthly dividend of $0.215 per share.

Further, Vermilion Energy has a record of creating shareholder value.

Value creation record of Vermilion Energy

Source: Vermilion Energy Investor Presentation – April 2015

Northern Property REIT is an Income Play of the Commodity Price Comeback

Northern Property REIT logo

Northern Property REIT (TSX:NPR.UN) is a real estate investment trust that owns housing properties, including rental apartments and town homes. It collects rent from a diversified portfolio of properties located across seven provinces in Canada, particularly from resource-rich areas. I’ve written about this REIT last month, so, I won’t go into too much detail.

Northern Property REIT is still priced at a discount, and it yields 6.5%, paying out a monthly distribution of $0.1358 per unit.

If you decide Northern Property is a fit for your portfolio, remember to buy it in your TFSA or RRSP because its distributions are not eligible dividends. You can still buy it in your non-registered account, but there’s some tax hassle.

In Summary

Ticker *Price *Yield 1FV Est. Margin of Safety Upside Potential
TSX:VET $58 4.5% $61 – 65 5 – 11% 5 – 12%
TSX:NPR.UN $25 6.5% $29 – 30 14 – 17% 16 – 20%
  • * Prices & Yields of April 15, 2015.
  • Margin of Safety = Margin of Safety from Fair Value Estimate (FV Est.)
  • Margin of Safety = (FV Est. – Price) / FV Est.
  • Upside Potential = Upside Potential to FV Est.
  • 1Estimate for end of 2016

Both Vermilion Energy, and Northern Property REIT are priced at a discount, though the latter is at a deeper discount. What are you adding to your income portfolio today?

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Disclosure: At the time of writing, I am long TSX:VET, and TSX:NPR.UN.

Disclaimer: I am not a certified financial advisor. This article is for educational purposes, so consult a financial advisor and or tax professional if necessary before making any investment decisions.

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2 thoughts on “Canadian Monthly Dividend Stocks for April 2015

  1. brian

    I’ve owned Vermillion for several years now. Its been in the doghouse recently, but has a great future with the Corrib project finally coming online. The company has created an incredible amount of value for its long term holders, and I view the dip in oil prices as a nice buying oppurtunity.

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