I’m a big fan of monthly dividend stocks. Modern life is built around the idea of the monthly billing cycle: the mortgage payment, car payment, health insurance premiums, electricity, water and phone bills. Even Netflix, Inc. (NFLX)! Virtually every regular expense we have runs on a monthly cycle, so why shouldn’t dividend stocks?
Bonds usually pay their coupon payments semiannually, and stocks generally pay their dividends quarterly. For retired investors living off of their portfolio income, this creates a mismatch. Expenses are regular, yet income is lumpy.
So, all else equal, monthly dividend stocks are a dream come true for investors. Now, some obvious, common-sense caveats apply here. You should never buy a stock because its dividend is paid monthly. The health of the underlying business, growth prospects, the quality of management and the stock’s valuation are all vastly more important than its dividend calendar.
But if I were hypothetically looking at two otherwise identical stocks, I’d clearly choose the stock with a monthly payout over the one with a quarterly payout. Some might argue that a monthly payout is nothing more than a cynical attention grabber designed to appeal to yield-starved retail investors. I disagree.
When I see a monthly payout, that tells me that management is making a real effort to give its investors what they want. So with that, let’s jump into our list of seven quality monthly dividend stocks.
Prices and data are from the original InvestorPlace story published on June 20, 2017. Click on ticker-symbol links in each slide for current prices and more.