For those savvy investors looking to increase their wealth not only through stock valuation but also through regular dividend payments, there are several stocks that pay monthly dividends that are worth a look. Monthly dividends can help you manage monthly expenses while still building stock value for retirement or other financial goals.
What Are Monthly Dividend Stocks?
Monthly dividend stocks are stock shares that pay an income to shareholders on a monthly basis. Most companies that provide stock dividends do so on a quarterly basis — monthly dividends are rarer. Since the payouts are cash, the investor can choose to use that money for whatever they like. Some people reinvest their dividends in stocks, bonds, or other diversified options like real estate. Others use the income to pay bills or fund emergency accounts. One of the benefits of investing in stocks with monthly dividends is the flexibility of the payouts.
The Importance of Dividend Diversification
While any industry can have companies that pay monthly dividends to stockholders, they’re most common in sectors that see a substantial and consistent income from business ventures each month. If you’re looking to invest in monthly dividend stocks, you’d do well to look at companies in the real estate, energy, utilities, and telecom industries. Diversifying your investments can help protect you against declines in any one industry.
When selecting a company to invest in, you’ll need to consider its market value, dividend yield, and payout history. Market value, or market capitalization, is a system for valuing companies consistently. To determine a business’s market value, multiply the company’s current share price by the number of outstanding shares.
The company’s dividend yield is another important metric to consider. To find it, divide the market value per share by the dividend per share. This will show you the percentage of the company’s value that’s paid out in dividends.
Finally, you should consider the company’s dividend history before investing. You’ll want to make sure the company is stable enough to support consistent dividend payouts, particularly if you plan to use the income to pay monthly expenses.
3 Monthly Dividend Stocks to Purchase
It’s important to research potential investments before buying shares. Consider these monthly dividend stocks to purchase, as they have excellent market value, high dividend yield, and a strong history of consistent monthly dividend payments.
Shaw Communications Inc.
Shaw Communications Inc. is a Canadian telecom company that has a solid history of producing positive income and paying out consistent dividends.
- Market value: $8.5 billion
- Dividend yield: 5.1%
Whitestone REIT is a real estate investment trust that manages a large number of shopping centers in up-and-coming regions, making it a strong contender in the monthly dividend field.
- Market value: $542 million
- Dividend yield: 7.06%
In the energy sector, the Canadian company Vermilion Energy offers a strong market value, good dividend yield, and a consistent history of increasing dividend payouts.
- Market value: $4.7 billion
- Dividend yield: 6.8%
Diversifying your investment portfolio with monthly dividend stocks can be a wise move for most investors. Do your research and select companies that will provide you with a consistent monthly payout.