A 7% Dividend Stock Paying Out Monthly

Monthly dividend stocks can be a strong choice because they make income feel more immediate and more useful. Instead of waiting around for a quarterly payout, investors get cash coming in every month, which can be reinvested faster or simply used for steady portfolio income. That rhythm can be especially appealing in a choppy market. When the underlying business also looks stable, a monthly payer can turn a boring account into something that feels pleasantly productive.

DIV

Diversified Royalty (TSX:DIV) is built for exactly that kind of investor. It is not a traditional operating company. It owns royalty interests tied to consumer-facing brands and collects a slice of system sales or fixed royalty payments from businesses including Mr. Lube + Tires, AIR MILES, Sutton, Mr. Mikes, Nurse Next Door, Oxford Learning, Stratus, BarBurrito, and Cheba Hut. That gives investors exposure to a mix of Canadian and U.S. brands without having to bet everything on one industry.

Over the last year, the story has been one of gradual improvement and a broader royalty base doing its job. The dividend stock kept paying monthly dividends and recently approved a March 2026 cash dividend of $0.024 per share, equal to $0.29 annualized. That steady payout is a big part of the appeal, especially for income investors who want something a bit more predictable than a cyclical stock.

The operating backdrop also looked encouraging through 2025. In the second quarter, Mr. Lube + Tires posted same-store sales growth of 11.3%, showing that at least some of the royalty partners were still producing healthy momentum. Because Diversified Royalty earns from several different brands, strength in one area can help smooth out weakness somewhere else. That kind of built-in diversification is not flashy, but it is useful.

Into earnings

On earnings, the key thing to watch is whether royalty income and cash flow can comfortably support the monthly payout. Through 2025, it continued operating as a diversified royalty platform with multiple brands contributing to the income stream, and management has kept the monthly dividend active into 2026.

Valuation is part of the appeal. Recent market data saw a market cap near $693 million. Using the current annualized dividend of $0.29 per share, the yield lands around 6.7%, plus a trailing price-to-earnings ratio near 23.9. That is not dirt cheap, but it also does not look wild for a company designed to deliver steady monthly cash from a basket of royalty streams.

The future outlook comes down to two things: growth from existing royalty partners and the chance to add more accretive royalty deals over time. That has long been the dividend stock’s playbook. If the current brands keep growing sales and management finds sensible new royalty assets, cash flow per share can keep edging higher. The main risk is that consumer-facing brands are not immune to slowdowns, so royalties can lose some momentum if spending cools. Even so, the multi-brand model gives Diversified Royalty a pretty sensible way to support monthly income for long-term investors.

Bottom line

Put it all together, and Diversified Royalty makes a solid case as a monthly income stock. It offers a yield around 7%, a business model built around collecting royalties instead of running stores, and a portfolio of recognizable brands that helps spread the risk around. And right now, that alone can bring in a lot of income from just a $7,000 investment.

COMPANYRECENT PRICENUMBER OF SHARESANNUAL DIVIDENDANNUAL TOTAL PAYOUTFREQUENCYTOTAL INVESTMENTDIV$4.061,724$0.27$465.48Monthly$6,999.44

It is not a no-risk pick, because consumer spending never is. But for investors looking for a dividend stock that pays out monthly, this one looks worth a serious look.

The post A 7% Dividend Stock Paying Out Monthly appeared first on The Motley Fool Canada.

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More reading

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• The Best Stocks to Invest $1,000 in Right Now

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.