Get Dividends Every Month
The idea is to assemble 12 stocks with alternating distribution dates, so you never wait long for cash.
One way for income-hungry investors to keep cash flowing is to assemble a portfolio that shells out dividends every month. For 10 years, I've published such a portfolio in Kiplinger's Investing for Income.
The idea is to assemble 12 stocks or funds with alternating distribution dates so that you never wait long for cash. This strategy can be a complement to a bond ladder, another time-tested tool for putting cash flow on autopilot.
Because share prices are soaring, the current yields on some former dividend favorites have dipped well below 2%. However, many other dividend aces still yield at or above 3%, headed by AT&T's 6.9%.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
So, with the full S&P 500 Index priced to yield just 1.4% (down from 2.4% a year ago), let me recast the Dividend-a-Month portfolio into a high-yield edition whose 12 elements average 3% or better on new money. Capital is spread over numerous sectors – a critical diversification advantage over an undisciplined chase for maximum yield. And you have growth opportunities.
Keep your cool. Do not get impatient over cyclical or short-term principal losses. A big dividend means these shares – oil stocks excepted – tend to trade in a tight price range.
Realty Income, the choice for November, is an exemplar. At $65 a share, it is close to its 52-week high. But every time Realty Income dips a few bucks, it bounces up.
The same holds for Verizon Communications. You can buy these sorts of securities on dips with confidence, presuming we do not suffer another bear market. Even in the spring of 2020, not every company or industry got scared or scarred enough to hack or eliminate dividends.
The timing for the portfolio is based on when you truly get paid, not the earlier date of record for shareholders to qualify for the next distribution. AT&T and Verizon are a dual entry. Both pay together in early February, May, August and November.
Pick one if you prefer, or hold some of each. But if I had scheduled them separately, the communications-services sector would account for too much of the whole portfolio. For more dividend stocks and other income ideas, see 35 Ways to Earn Up to 10% on Your Money; for payouts every month, read on.
Disclaimer
Prices and yields are as of April 9.
- Jan.: Physicians Realty Trust (DOC, $18, yield 5.0%)
- Feb.: Valero Energy (VLO, $71, 5.5%)
- March: American Electric Power (AEP, $86, 3.4%)
- April: Coca-Cola (KO, $53, 3.2%)
- May: AT&T/Verizon (T, $30, 6.9%; VZ, $57, 4.4%)
- June: Pfizer (PFE, $37, 4.2%)
- July: Cisco Systems (CSCO, $52, 2.9%)
- Aug.: General Dynamics (GD, $183, 2.7%)
- Sept.: Truist Financial (TFC, $60, 3.0%)
- Oct.: Kimberly-Clark (KMB, $137, 3.3%)
- Nov.: Realty Income (O, $65, 4.3%)
- Dec.: Chevron (CVX, $103, 5.0%)
These are familiar names, and you may already own a few. They may not be cheap, though none scream overvalued. I advise you to buy on dips or make phased purchases. I am also not claiming there aren't equally good alternatives. But I have followed each of these with confidence for years.
American Electric Power is not the only fine utility, but I have always appreciated its straightforward business model. Kimberly-Clark just declared a 5.5% dividend boost, and General Dynamics raised its payout by 8%; both are generous at this time.
Truist trades at a moderate price-to-book-value ratio compared with its peer banks, and the Federal Reserve has taken the shackles off bank dividends. Valero is a refiner and marketer, which balances oil producer Chevron. The two REITs cater to entirely different groups of tenants. You get the idea. Enjoy your dividends.
-
Starbucks BOGO and New Sweet and Spicy Drinks
For a limited time, Starbucks is announcing four new "swicy" drinks that are both spicy and sweet.
By Kathryn Pomroy Published
-
Stock Market Today: Dow Slips After Travelers' Earnings Miss
The property and casualty insurer posted a bottom-line miss as catastrophe losses spiked.
By Karee Venema Published
-
Stock Market Today: Dow Slips After Travelers' Earnings Miss
The property and casualty insurer posted a bottom-line miss as catastrophe losses spiked.
By Karee Venema Published
-
Stock Market Today: Stocks Stabilize After Powell's Rate-Cut Warning
The main indexes temporarily tumbled after Fed Chair Powell said interest rates could stay higher for longer.
By Karee Venema Published
-
Stock Market Today: Stocks Reverse Lower as Treasury Yields Spike
A good-news-is-bad-news retail sales report lowered rate-cut expectations and caused government bond yields to surge.
By Karee Venema Last updated
-
Stock Market Today: Nasdaq Leads as Magnificent 7 Stocks Rise
Strength in several mega-cap tech and communication services stocks kept the main indexes higher Thursday.
By Karee Venema Published
-
Stock Market Today: Stocks Tumble After a Hot Inflation Print
Equities retreated after inflation data called the Fed's rate-cut plans into question.
By Dan Burrows Published
-
Stock Market Today: Stocks End Mixed Ahead of Key Inflation Reading
Equities struggled before tomorrow's big Consumer Price Index report.
By Dan Burrows Published
-
Stock Market Today: Stocks Closed Mixed in Choppy Trading
Volatility returned as market participants adjusted their expectations for rate cuts.
By Dan Burrows Published
-
Stock Market Today: Stocks Rally After Blowout Jobs Report
Stocks soared into the weekend as investors brushed off strong payrolls data and lowered rate-cut expectations.
By Dan Burrows Published