Amid easing inflation, the Bank of Canada has slashed interest rates five times since June, with its benchmark interest rates declining to 3.25%. Amid falling interest rates, investing in monthly-paying dividend stocks that offer higher yields would be an excellent strategy to earn a stable passive income. Against this backdrop, here are my three top picks.

NorthWest Healthcare Properties REIT

NorthWest Healthcare Properties REIT (TSX:NWH.UN) operates 186 highly defensive healthcare properties, with a gross leasable area of 16 million square feet across eight countries. It has signed long-term lease agreements with government-backed tenants, thus allowing it to enjoy healthy occupancy and collection rates. Also, around 85% of its lease agreements are inflation-indexed, shielding its financials against rising expenses.

Further, the REIT has undertaken a non-core asset sales program to strengthen its financial position. Under this program, it has disposed of around 50 properties, generating $1.3 billion in net sales and utilizing the net proceeds to lower its debt levels. Besides, the company has listed 19 other properties for sale, which it expects to dispose of over the next 12 months, generating $122.8 million.

Also, NWH is developing next-gen properties that could deliver long-term earnings growth for its investors. Given its improving financial position, stable cash flows, and healthy growth prospects, NWH could continue rewarding its shareholders at a healthier rate. It currently offers an impressive forward dividend yield of 7.6%, making it an excellent buy.

Extendicare

Another monthly-paying dividend stock that I am bullish on is Extendicare (TSX:EXE), which has delivered an impressive 54.4% return this year. Its solid quarter performances and strategic acquisitions have made investors optimistic, thus increasing its stock price. In the recently reported third-quarter performance, the company's revenue and adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) grew by 11.3% and 42.4%, respectively. Volume growth, increased prices, strong performance from its managed services segment, and higher LTC (long-term-care) funding boosted its financials.

Moreover, the company is working on acquiring nine Class C LTC homes in Ontario and Manitoba from Revera for $60.3 million. This transaction would add 1,100 beds to its redevelopment pipeline. Besides, the company is also constructing a 256-bed LTC home in St. Catharines, Ontario, to replace an existing 152-bed Class C home. The company also hopes to start building two additional homes this quarter. Given its solid financials and healthy growth prospects, Extendicare could continue rewarding its shareholders with healthy dividends. With a monthly dividend of $0.04/share, it currently offers a forward dividend yield of 4.5%.

Pizza Pizza Royalty

Third on my list would be Pizza Pizza Royalty (TSX:PZA), which offers an impressive forward dividend yield of 7%. The company has adopted a highly franchised business, collecting royalty from its franchisees based on their sales. So, its financials are less susceptible to inflation, thus generating stable and predictable cash flows. The company intends to distribute all the available cash to its shareholders through dividends.

Meanwhile, the pizza franchise has been witnessing a decline in its same-store sales growth for the last two quarters. Management has blamed the reduction in consumer spending for the decline. However, the company is hopeful that its value offerings, menu enhancements, and ongoing improvement in its restaurants and digital customer experiences could lead to a recovery in its sales. Besides, the company continues to expand its royalty pool network by adding 31 restaurants over the last four quarters. It expects to continue its expansion and hopes to increase its store count by 3–4% this year.