While most companies pay dividends on a quarterly basis, monthly dividend stocks distribute their dividend payouts 12 times a year.
The reason companies pay dividends every month instead of quarterly, semi-annually, or annually are unique to each company. But, a good number choose to distribute dividends monthly to keep a close rein on their cash flow, since dividends are paid from profits.
Investors pile into monthly dividend payers for a number of reasons. Some use them as a means of getting a steady stream of income. Some find it an efficient way to budget for expenses each month. And, some simply enjoy the frequency of getting a dividend payment 12 times a year instead of once, or every three or six months.
Plus, owning dividend-paying stocks, in general, carries the added benefit that dividend payments can increase, and moreover, dividend-paying stocks are historically better performers than non-payers.
And while quarterly and monthly dividend payers aren't immune to market gyrations, studies show they provide healthier returns than non-payers. For instance, in the rocky months of March and April, returns for dividend payers averaged 1.3% and 0.89% respectively versus negative 2.3% and 2.6% respectively for nonpayers, according to FactSet.
All dividend payers, however, are not created equal - simply chasing yield is never prudent. With that in mind, following are five monthly dividends stocks with stable businesses, reliable dividend payment track records, and attractive yields.
Five Monthly Dividend Stocks for Yield and Income
Goldcorp Inc. USA (NYSE: GG) is one of the fastest-growing, lowest-cost senior gold producers. Operations and development projects are in politically stable jurisdictions throughout North, Central, and South America. Its strong project pipeline is positioned to drive long-term, sustainable growth. Despite a difficult year for gold miners in general, dividends paid by Goldcorp in 2013 totaled $486 million, up from $438 million in 2012. Dividends were also boosted in 2010 and 2011. GG's present monthly payout is a nickel a share for a 2.59% yield.
Citigroup rates GG a "Buy" and says it's "one of the few large gold producers who we estimate will deliver meaningful low-cost growth ounces over the next several years." GG stock is up 6.69% year to date and traded at $23.03 Friday.
While GG's yield is solid, this next monthly dividend payer yields about three times as much...