3 Monthly Dividend Stocks with Yields up to 7% From Canada

Exchange Income Corp. has been increasing their dividends since 2004. They kept the dividend consistent during the 2009 – 2010 financial crisis time, which is completely understandable considering the Big Five Canadian banks all did the exact same thing. Effectively, EIF.TO has increased their dividend 11 times in the past 12 years, raising the dividend from $1.08 in 2004 to $2.01 in 2016.

Investors need not worry about the dividend being cut either, due to their intelligent acquisitions and allocation of capital, EIF.TO has significantly reduced their payout ratio in the past couple of years to the point that they may begin to increase the dividend growth in the near future.

EIF.TO calculates their payout ratio from Free Cash Flow minus maintenance capex. In Q1 2016, payout ratio was 79% versus 109% in 2015. The trailing twelve month payout ratio is even 20% healthier, at a mere 59%. Due to their most recent 5% increase, they have increased their dividend by 20% in the last 18 months.

TransAlta Renewables Inc (TSE:RNW)

TransAlta Renewables Inc.(RNW.TO) is the result of a spin-off from TransAlta about three years ago, much like Enbridge Income Fund Holdings is to Enbridge.

TransAlta has dropped down the majority of their renewable energy facilities to TransAlta Renewables, and they are currently investing in bringing online their South Hedland power station in Australia.

Once South Hedland is online, TransAlta Renewables Inc (TSE:RNW) has already announced they expect to increase the dividend by 6% to 7% in the coming year.

Every year since their IPO, TransAlta Renewables Inc (TSE:RNW) has increased their dividend. Even disregarding the dividend growth attributable to RNW.TO, the stock currently yields 6.8% and pays out dividends monthly.

With the election of the Liberal government in Canada, renewable energy has been a very hot topic as they are very clear in their intentions to transition to cleaner energy.

Compared to the other renewable energy stocks in Canada, TransAlta Renewables Inc. was the clear winner to me. Hold the stock and collect that growing dividend as you make a positive impact on the world and the environment; I find it personally rewarding to be a part of something bigger than myself, even in this small way.