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I’d Invest $7,000 in This Under-the-Radar Monthly Dividend Stock for Life

For those focused on dividends, selecting the ideal corporation to include in their investment lineup can prove more challenging than anticipated, considering the multitude of factors potential investors weigh when choosing dividend-paying stocks.

Certain investors might prefer receiving a robust dividend yield initially. Some could be drawn to a specific company’s track record of increasing dividends over time. Meanwhile, others might focus on the timing of dividend payouts and whether they match up well with their own financial requirements for liquidity. In this case, corporations offering monthly dividend distributions could prove particularly appealing.

The positive aspect is that numerous firms listed on the TSX distribute monthly dividends. For those considering a long-term investment strategy, here’s an excellent choice that I believe merits investing $7,000 now with plans to hold onto it for many years.

Mullen Group

As the biggest logistics company in Canada,

Mullen Group

(

TSX:MTL

The firm might not receive as much attention as it deserves. One of its standout features is the capability to offer monthly dividend payouts, with Mullen recently boosting its monthly distribution to $0.07 per share. This aspect has undoubtedly attracted income-focused investors seeking opportunities within their own country.

From my standpoint, Mullen’s 5.9% dividend yield serves as an extra perk, complementing their impressive performance in consolidating the Canadian freight industry over recent months. Essentially, this has resulted in strong prospects for sustained growth, which bodes well for long-term investors. This sentiment is further supported by the upward trajectory evident in Mullen’s stock chart, highlighting the potential of these long-term trends.

The major player in the logistics industry’s string of purchases over the last few years enabled Mullen to report a 7.5% increase in revenue along with an almost 3% rise in operating income compared to the previous year. Although net income decreased partly because of margin challenges stemming from the broader economic climate, cash flow saw improvement in the most recent quarter, indicating that the firm’s dividend continues to be securely maintained.

Given Mullen’s present earnings trend, its dividend continues to be sufficiently supported; however, I anticipate seeing growth in this area over the next few quarters. While the firm navigates through a somewhat turbulent phase, I believe shareholders will benefit from holding onto this stock for the long haul.

Dividends are extremely important.

With a company such as Mullen, it’s clear that it may not be suitable for everybody. The freight industry is particularly challenging. Although Mullen has excelled at bringing various elements of this market together, it’s important to recognize that this sector faces both cyclicality and broader economic influences.

In spite of that, for long-term investors counting on sustained consistent expansion within both the Canadian and broader North American markets, this stock offers a monthly dividend payout which I believe merits consideration. Additionally, it should be highlighted that Mullen distributes what is categorized as an “eligible dividend” under Canadian taxation rules, offering extra fiscal advantages specifically for residents of Canada.

In my view, this is a share that has the potential to keep outpacing the market and deliver impressive overall returns over an extended period. Even without considering capital gains, Mullen should yield 6% solely from dividends, which are distributed monthly. That says it all.

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I would invest $7,000 in this undervalued monthly payer stock for decades.

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More reading

• 
  Why Investing in Mullen Group Could Be the Smart Move for $5,000 in May 2025
  
• 
  5 Canadian Dividend-Paying Stocks to Consider for Long-Term Holding in Your TFSA for Retirement Income
  

Fool contributor

Chris MacDonald

does not hold any shares in the companies discussed above. However, The Motley Fool holds positions in and endorses Mullen Group. The Motley Fool also has a

disclosure policy

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