Additionally, the more dividend income you earn, the more shares you can buy for your portfolio, which only increases the compounding effect over time.
And while most TSX dividend stocks pay out their distributions every quarter, there are a handful of high-quality companies that actually pay investors every month.
That makes these stocks even more attractive because the more frequent payments not only give you a more predictable income stream, but also let you reinvest your money faster and improve the compounding effect.
The key, of course, is to ensure that the monthly dividend is supported by a strong and reliable company. There is no point in collecting revenue every month if the underlying business is inconsistent or the dividend is at risk.
So, with that in mind, if you’re looking for a top TSX dividend stock to buy now that pays its dividend every month, K-Bro linen (TSX:KBL) is a stock you might want to consider.
Why is K-Bro one of the best TSX dividend stocks to buy today?
K-Bro is a $450 million dividend stock that is Canada’s largest provider of laundry and linen services and is rapidly expanding its operations in the United Kingdom
The company serves the healthcare and hospitality industries, handling everything from hospital linens to hotel bedding. And while that may not sound exciting at first, it is one of the most stable sectors you can invest in.
K-Bro is a stock that tends to fly under the radar compared to many of the larger dividend stocks on the TSX, but its business is essential and demand is stable. That’s why it’s a company you can hold on to with confidence for the long term.
For example, healthcare makes up almost 60% of K-Bro’s business, and demand in that segment is incredibly consistent. Even recently, management noted that healthcare market conditions were strong across Canada, helped by efforts to reduce wait times and improve patient care. That kind of essential demand is what makes K-Bro’s cash flow so reliable.
Meanwhile, demand on the catering side was also healthy. In Canada, increased staycation activity has contributed to the increase in hotel occupancy, supporting steady volume growth for the TSX dividend stock.
Why K-Bro still has years of growth potential
Although K-Bro operates in a mature industry, it still has several long-term growth opportunities.
Firstly, the integration of the Stellar Mayan acquisition, which was completed in mid-2025, opens the door for significant expansion in the UK market. Moreover, these acquisitions not only increase market share; they also improve K-Bro’s expertise and reduce costs by finding synergies.
Furthermore, in addition to this acquisition, and the potential for more in the future, in Canada, continued investments in healthcare infrastructure and strong trends in the hospitality industry support stable earnings and earnings before interest, taxes, depreciation and amortization (Ebitda) grow.
How cheap is the TSX dividend stock?
The best thing about K-Bro Linen is that it is one of the few reliable, high-quality TSX dividend stocks still trading at a reasonable valuation.
While K-Bro is trading around the middle of its 52-week range, it currently trades at a forward enterprise value-to-EBITDA (EV/EBITDA) ratio of just 7.1 times. That’s less than the five-year average of 8.6 times, showing that K-Bro is currently undervalued.
Plus, the stock pays you to own it every month while you wait for the stock to recover to its fair value and continue to grow from there.
At just over $35 per share, K-Bro’s yield is around 3.4%, and with a payout ratio of only about 30% of free cash flow this year, it’s clear the dividend is more than sustainable.
So if you’re looking for a reliable TSX dividend stock that will make you money every month and continue to consistently grow its business over the long term, K-Bro Linen is a stock you’ll want to consider buying soon while it’s still undervalued.
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