This 4% dividend stock pays cash every month

Dividend stocks are often among the most important companies you own in your portfolio. A high-quality company that pays a reliable dividend, offers significant returns and has strong long-term growth potential is a company you can trust for years to come. And when these stocks return capital to investors every month instead of every quarter, they become even more attractive.

Long-term investing is about letting time do the work for you and building your capital. Monthly dividend stocks help speed up that process, because receiving income every month instead of every quarter gives you the chance to reinvest faster, put your money back to work more quickly, and increase the compounding potential of your portfolio.

In Canada, investors can consider several monthly dividend stocks, but one of the best sectors to start with is real estate.

Real estate companies make excellent monthly dividend stocks because they have established, reliable and defensive businesses, as well as generating significant cash flow every month.

So if you’re looking for a top monthly dividend stock to buy today, here’s why Canadian Apartment Properties REIT (TSX:CAR.UN) is one you’ll want to check out now.

CAPREIT’s current discount makes it one of the best dividend stocks you can buy right now

When it comes to buying and holding stocks for the long term, an attractive valuation must first and foremost be top-notch.

Canadian Apartment Properties (CAPREIT) is one of the best monthly dividend stocks to buy because it’s a massive $6 billion company in one of the most defensive sectors of the economy. CAPREIT is the largest residential REIT in Canada, with tens of thousands of units across the country.

This makes it an incredibly reliable company and an ideal monthly dividend stock to buy now and hold for the long term.

And the best part for investors is that CAPREIT is currently trading at the low end of its 52-week range. So not only can you buy one of the best REITs in Canada at a discount, but because the stock is so cheap, it’s dividend yield has also risen above 4%.

When will CAPREIT’s stock price turn around?

While CAPREIT is a high-quality and reliable company that you can rely on for the long term, like many real estate stocks, it has been hit by higher interest rates in recent years, which has weighed on profitability.

So with interest rates on the decline, CAPREIT should see its margins improve, which could not only lead to higher profits but ultimately translate into more dividend growth.

Additionally, with stock trading so cheap, the REIT is actively buying back shares. For example, CAPREIT currently trades at a forward price-to-funds-from-operations (P/FFO) ratio of just 14.9 times. That’s well below the five-year average forward P/FFO ratio of 19.6 times.

Moreover, at the time of writing, the dividend yield is not only slightly above 4%, but that is also significantly higher than the five-year average dividend yield of 3.1%.

Therefore, while one of the best and most reliable Canadian real estate stocks trades cheaply and continues to offer an attractive monthly dividend, it is easily one of the best investments passive income seekers can make today.