I just love dividend stocks for several reasons. For one, they provide you an extra passive income source that you can earn without any additional effort. Secondly, you don’t have to sell your investments to realize your gains; they trickle in as cash with each dividend payout. Finally, dividends give you the opportunity to compound your investment, which leads to faster growth of your portfolio.

The Toronto Stock Exchange (TSX) is a great place to fish for some great dividend stocks. Personally, I love monthly dividend stocks because they give you a monthly income which is easier to manage than receiving payment once every three months. Also, monthly dividends allow for the fastest compounding.

In this article, I bring you three of my personal favorite monthly dividend stocks from the TSX. These three stocks with steady and high monthly yields can easily compete with the US stock market as well. So, you are barely losing out.

TransAlta Renewables (RNW.TO)

This Calgary-based company is into developing, operating, and owning renewable energy generations. As of this article, the company operates 22 wind farms, 1 solar farm, 13 hydropower plants, and 6 natural gas producers. Together, the company boasts about a total of 2,537 megawatts of power generation.

As of the article date, TransAlta Renewables’ share price stood at CA$19.25 per share, which yielded a succulent 4.85% dividend per annum. However, this price is still about a 17% drop since the beginning of 2021. On a 5-year chart, the company share price has grown quite well. Green energy is the future.

In the second quarter of 2021, TransAlta reported revenue of $92 million and net earnings of $25 million. The company also holds cash of about $40 million for distributions. The company pays out about 80% – 85% of its cash available for distribution.

First National Financial Corporation (FN.TO)

This Toronto-based company engages in underwriting services for residential and commercial mortgages in Canada. With a history running back to 1988 and with over 1,505 employees in 2021, the company has withstood the test of time.

First National Financial provides a juicy dividend yield of 5.19% based on the share price of CA$43.93 at the date of this article. The share price is only about 5% up from the beginning of 2021, which gives a strong buying opportunity. In the last 5-years, the share price has almost doubled. So, the stock shows some strong signs of capital appreciation as well.

An interesting article by Simply Wall St. indicates that insiders hold a large portion of the shares of the company. This shows a strong level of confidence among the insiders of the company. A collective of 38% of the shares is owned by insiders while another 33% is owned by private companies. The general public and other institutional investors own 24% and 5% respectively.

First National Financial also boasted a strong second quarter in 2021, with a 6% increase in revenue to $365 million compared to Q2 2020. Net income, too, increased by 3% during the same period.

Timbercreek Financial Corporation (TF.TO)

Timbercreek Financial is a mortgage investment company, provides shorter-duration structured financing solutions to commercial real estate investors in Canada.

As of June 30, 2021, the Company has 113 mortgage investments, with an average investment value of $10 million. 89% of the investments are in income-producing properties, thus ensuring investor money is put into good use. From Q2 2020 to Q2 2021, the net income of the company grew by 15% and reduced their massive payout ratio by 9% to 86%, which is actually better for the health of the company.

As of the date of this article, Timbercreek Financial pays a dividend of CA$0.69 per annum. On today’s share price of CA$9.67, this represents a massive yield of 7.03% per annum. The share price has seen a growth of about 12% YTD, however has failed to deliver any significant capital appreciation over the last 5 years. This stock is only for the high dividend yield.

I personally added Timbercreek Financial to my dividend portfolio to create a dividend snowball out of it.

All of these stock picks have the potential to earn you a very good passive income every month.

An important thing to note is that everything mentioned in this article is my personal opinions based on publicly available data on each company. I’m not a financial advisor and thus any of this information should not be perceived as financial advice. You always have to do your own research before investing your hard-earned money.

Let us hear your thoughts on these picks in the comments below.