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Generally, retirees would want to supplement their pension payouts, such as the Canada Pension Plan and Old Age Security, with other passive income sources. One low-cost strategy to begin a passive and recurring income source is to invest in quality dividend stocks . Moreover, a few Canadian dividend stocks have a monthly payout that can be aligned with recurring expenses such as utilities and groceries.
One such monthly dividend stock to own right now is Sienna Senior Living ( TSX: SIA ), which offers you a yield of 4.8% in October 2026. Over the past decade, the TSX stock has returned 120% to shareholders in dividend-adjusted gains, outpacing the long-term inflation rate. Source: Getty Images What does Sienna Senior Living do, and why does it pay monthly?
Sienna runs retirement residences and long-term care (LTC) homes across Canada. About 15,500 team members care for roughly 14,000 residents each day, CEO Nitin Jain said on the August 5 earnings call. The stock pays you a monthly dividend of $0.078 per share or $0.94 annually, which translates to a yield of 4.8%.
The key driver behind the payout is organic. Canada is aging fast, and Jain told analysts the country needs 60,000 more LTC beds over the next 10 years. Even with new homes being built, he said, the system would still struggle to fill the gap.
A strong performance in Q2 In Q2 2026, Sienna increased revenue by 13% year over year to $288.2 million. Its same-property net operating income surged 19.4% to $57.6 million. This metric measures profit from buildings the company has owned for a full year.
The retirement segment grew 15.2%, while LTC grew 22.6%. Average same-property occupancy hit 94.1%, up 1.5 percentage points from a year earlier and rose to 94.5% in July. Care revenue is up about 37%, Jain said, thanks to the Aspira wellness program launched last year.
Is Sienna’s monthly dividend safe? The adjusted funds from operations (AFFO) payout ratio fell to 72.3% from 89.5% a year ago. AFFO is the cash left over for shareholders.
So Sienna now spends about 72 cents of every dollar on the dividend and uses the rest to fund future growth. AFFO per share rose 24.4%. Analysts tracking the TSX stock forecast AFFO per share to expand from $1.31 in 2026 to $1.52 in 2028, which should translate to future dividend hikes.
Sienna has raised the annual dividend from $0.85 in 2012. However, it has maintained the current payout since 2020. Sienna ended Q2 with an average cost of 3.9%.
Moreover, the net debt accounts for 35% of gross book value. With $604 million in total liquidity, Sienna’s debt has a confirmed BBB credit rating as per Morningstar DBRS. Sienna closed two retirement residence purchases worth $100 million last quarter, and a newly built $68 million LTC home is under contract.
It also formed a 50/50 joint venture with Fiera Infrastructure to rebuild older LTC homes. The first target is $625 million of projects. Jain said the partnership has “doubled our capacity for redevelopment.” Jain aims to focus on customer retention rather than acquisition.
“We would rather have sustained growth over the next 5, 10 years than a big bang for a year and a lot of upset residents,” he said. Management now expects retirement NOI growth above 10% in 2026 and raised its LTC target to the mid-to-high single digits. Is Sienna a good stock to buy right now?
LTC results are also tied to government funding, and management said growth should eventually cool to low single digits. Some of this year’s boost came from catch-up payments in Alberta and British Columbia. Sienna also sold $98 million of shares in the quarter to fund growth, which dilutes existing shareholder wealth.
If the dividend stock is priced at 15 times forward AFFO, it could surge 15% within the next 15 months. If we adjust for dividends, cumulative returns could be closer to 20%.
Source: The Motley Fool Canada
