Investors looking to fill their coffers with a steady stream of monthly income have plenty of ways to accomplish that task — bonds, dividend stocks, MLPs, REITs … you name it.
But one thing often lost in the weeds is that most income-paying assets do so on a quarterly basis, meaning those actually looking for a very regular paycheck — namely, every month — have to do a little strategizing.
Profitable Investing Editor Richard Band’s newsletter provides a detailed portfolio from which you can pick several stocks that, when held together, will give you a 12-month cycle of dividends. Using a sampling of Band’s picks, here’s a great example of how his system can work for you:
- GlaxoSmithKline (GSK) currently pays its investors 55 cents per share in January, April, July and October.
- AT&T (T) distributes its 45 cents per share in February, May, August and November.
- Chevron (CVX) rewards you with $1 per quarter in March, June, September and December.
Let’s say you bought one share of all three — this is theoretically what your dividend portfolio would look like for 2014:
Needless to say, you would want to buy more than one share of each, and given their varying payout sizes, you would buy different lots of each if you expected to reap the same-sized dividend check every month.
A couple other things to note. For one, while dividend payout times are pretty consistent for each company, they can swing a few days in either direction, meaning it’s possible these companies won’t necessarily conform to this table, though it would be close. Also, these dividend amounts probably won’t be static — CVX and T typically increase their payouts at least once a year, and GSK’s quarterly payout can vary up and down (but typically increases on an annual basis).
For what it’s worth, I think another solid trio that would get you there is adding General Electric (GE) and Qualcomm (QCOM) to AT&T, which would take care of the issue of GSK’s gyrations.
Of course, perhaps the easiest option can be found in Band’s portfolio — real estate investment trust Realty Income (O), which actually pays out on a monthly basis.
That’s as simple as simple gets.
So, get started on creating your own portfolio, and if you’d like Band’s help, click here to check out his Profitable Investing portfolio.
Marc Bastow is an Assistant Editor at InvestorPlace.com. As of this writing, he was long GE.
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