Dividends Paid Every Month

05/09/2014 9:00 am EST


Richard Moroney

Editor, Dow Theory Forecasts

We rarely feature long lists of stocks—but an exception is warranted here. Richard Moroney, editor of Dow Theory Forecasts, shows investors how to build a portfolio that pays monthly income—by choosing stocks with different payment schedules.

Many income investors crave the reliable, quarterly cash stream that dividends offer. Here, we present a portfolio—of 27 stocks—that provides those cash flows every month.

Not only does the portfolio provide monthly dividend income, but it also focuses on quality stocks, positioning investors to benefit from price appreciation and dividend growth. All of these stocks are suitable for purchase as part of a diversified portfolio.

The “dividends-every-month” portfolio skews heavily toward financials and utilities (26% of components), though it also gives investors exposure to sectors not typically known for their dividends, such as industrials, materials, and technology. Stocks from eight of the ten S&P sectors are present in the portfolio.

The following 27 stocks yield, at least, 1.5%. A portfolio containing equal-dollar amounts of each stock would yield 3.0%.

Dividends paid January, April, July, and October

AmTrust Financial (AFSI)—yield 2.2%

Comcast (CMCSA)—yield 1.8%

Dow Chemical (DOW)—yield 3.1%

Fifth Third Bancorp (FITB)—yield 2.3%

J.P. Morgan Chase (JPM)—yield 2.7%

Macy’s (M)—yield 1.7%

Schlumberger (SLB)—yield 1.6%

UGI (UGI)—yield 2.5%

Union Pacific (UNP)—yield 2.0%

Dividends paid February, May, August, and November

Alliant Energy (LNT)—yield 3.6%

AmeriGas (APU)—yield 7.6%

Apple (AAPL)—yield 2.3%

Capital One Financial (COF)—yield 1.6%

CMS Energy (CMS)—yield 3.7%

CVS Caremark (CVS)—yield 1.5%

Idacorp (IDA)—yield 3.1%

Och-Ziff (OZM)—yield 14.1%

PNM Resources (PNM)—yield 2.7%

Dividends paid March, June, September, and December

Avista (AVA)—yield 4.1%

BlackRock (BLK)—yield 2.6%

GATX (GMT)—yield 2.0%

Kroger (KR)—yield 1.5%

Magna Int’l (MGA)—yield 1.6%

Norfolk Southern (NSC)—yield 2.3%

Penske Automotive (PAG)—yield 1.7%

Qualcomm (QCOM)—yield 1.8%

Wells Fargo (WFC)—yield 2.5%

At 3.0%, the portfolio offers a higher average dividend yield than the S&P 500 (SPX), yet its average payout ratio of 43% is roughly comparable to the index average.

Most of the stocks in our portfolio have a long, solid history of dividend growth. Our stocks also look inexpensive, averaging P/E ratios of 16, or 19% below the average for S&P 500 dividend-payers.

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