Last Updated on October 23, 2023 by SPN Editor
When I think about generating a steady stream of passive income, my initial venture was into the world of stock trading. Some days were marked by fortune, while on others, I saw more than 200 percent of my earnings vanish in thin air without a fraction of a second. I eventually decided to step back from the volatile stock market. However, the allure of high-dividend stocks pulled me into becoming a full-time stock investor, transitioning from a trader to a long-term investor.
Among various investment options like fixed deposits, bonds, and mutual funds, the stock market proved to be the most profitable and legitimate channel for transforming my hard-earned money. While these investments might offer returns of about 5-10 times the initial investment over a period of 10-15 years, the stock market provided the potential to earn more than 20 times the initial investment, signifying a substantial profit.
Beyond the remarkable return on investment, some stocks offer a consistent stream of passive income in the form of dividends. These dividends are not only passive but also low-risk. In this article, I will introduce some high-paying dividend stocks that are ideal for generating passive income.
In the case of dividend stocks, most companies follow a quarterly distribution schedule. However, imagine a scenario where you receive dividend payments not every three months, but every month. This is indeed possible, thanks to a select group of companies that pay monthly dividends. Realty Income Corp. (NYSE:O) is a prime example, having followed this practice for decades. Real estate, where tenants usually pay rent monthly, is a popular sector for investors seeking passive monthly income.
Yet, the key is not solely in finding monthly dividend payers but in strategically selecting and combining companies that distribute their dividends in different months. This way, you can construct a portfolio that yields monthly returns, and it doesn’t even require a multitude of stocks.
Two stocks provide passive income every month. Invest in these Dividend stocks for monthly passive income revenue.
Stag Industrial, Inc. (NYSE: STAG) Stag Industrial is a real estate investment trust (REIT) focused on single-tenant industrial properties. As e-commerce and logistics continue to grow, so does the demand for industrial spaces. This REIT has capitalized on that trend, making it a strong choice for monthly dividend income. Stag typically pays dividends around the 15th of each month. With a diversified portfolio of industrial properties, it offers investors a reliable income source.
Shaw Communications Inc. (TSE: SJR.B) Shaw Communications is a leading Canadian telecommunications company, providing services such as internet, cable, and phone. It’s known for its consistent monthly dividends. While it’s not a U.S.-based stock, it can be an attractive choice for investors looking for monthly income. Shaw usually distributes dividends on or around the 27th of each month.
Besides, there are three dividend stocks when combined will provide monthly passive income. Here are three dividend stocks that, when combined, offer regular dividends on a monthly basis from January to December.
PepsiCo Inc. (NASDAQ: PEP)
Established beverage companies have proven their ability to provide consistent dividends. Instead of choosing between Pepsi and Coke, why not opt for both? The resilience of these companies is evident, as even during a recession, a can of Coke or Pepsi remains affordable to most people.
PepsiCo, in addition to its global beverage offerings, features a popular convenience foods portfolio that includes household names like Lay’s, Doritos, and Cheetos. PepsiCo has increased its dividend to shareholders for 51 consecutive years and currently offers a dividend yield of 3.2%. Shareholders can expect dividend payments in January, March, June, and September.
Procter & Gamble Co. (NYSE: PG)
Procter & Gamble is deeply rooted in the consumer staples industry, with renowned brands like Tide, Bounty, Gillette, and Pampers. The company offers a range of products that households purchase regularly, ensuring a steady stream of revenue through various economic conditions. This resilient business model not only allows the company to consistently pay dividends but also to increase them year after year.
In April, P&G’s board approved a 3% increase in the quarterly dividend, marking the 67th consecutive year of dividend hikes. At the current share price, P&G offers an annual yield of 2.6%, with dividends typically paid on the 15th day of February, May, August, and November.
Coca-Cola Co. (NYSE: KO)
Coca-Cola, the beverage giant, also has an impressive track record of returning value to investors. In 2022, it disbursed $7.6 billion in dividends to shareholders. In February, Coca-Cola announced its 61st consecutive annual dividend increase, raising the quarterly payout from 44 cents to 46 cents per share. The company now boasts a yield of 3.4%, with dividends typically arriving in April, July, October, and December.
FAQs on Dividend Stocks
Q1: Why are high-dividend stocks an attractive option for passive income?
High-dividend stocks offer a consistent stream of passive income in the form of dividends. These dividends are low-risk and require minimal effort on the part of investors, making them an appealing choice for generating income.
Q2: Can I receive dividends more frequently than quarterly payouts?
Yes, it’s possible to receive dividends on a monthly basis. Certain companies, known as monthly dividend-payers, distribute dividends every month. These are particularly attractive for investors seeking regular monthly income.
Q3: How can I create a portfolio that generates monthly returns from dividends?
By strategically selecting and combining companies that distribute dividends in different months, you can construct a portfolio that yields monthly returns. This diversification ensures you receive a consistent monthly income.
Q4: What are some high-dividend stocks that offer monthly passive income?
Two such stocks include:
- Stag Industrial, Inc. (NYSE: STAG): This real estate investment trust specializes in single-tenant industrial properties and typically pays dividends around the 15th of each month.
- Shaw Communications Inc. (TSE: SJR.B): A leading Canadian telecommunications company, Shaw Communications is known for its consistent monthly dividends, usually distributed around the 27th of each month.
Q5: Are there dividend stocks that provide monthly income throughout the year?
Yes, three dividend stocks, when combined, can provide monthly passive income from January to December. These include:
- PepsiCo Inc. (NASDAQ: PEP): Distributes dividends in January, March, June, and September.
- Procter & Gamble Co. (NYSE: PG): Offers dividends in February, May, August, and November.
- Coca-Cola Co. (NYSE: KO): Provides dividends in April, July, October, and December.