One of the major problems with retirement planning is figuring out how to spend your nest egg. One of the best solutions: monthly dividend stocks.
Building it up isn’t necessarily that hard or complicated. But once you crack it open, finding a balance between cash flows and paying bills is the tricky part. After all, most mutual funds, ETFs, stocks and bonds all pay their distributions on a quarterly, semi-annual or annual basis.
That’s a problem when your cable bill is due every month.
However, you can get an even more regular inflow of cash via monthly dividend stocks. After all, getting an income check every 30 days or so from your portfolio could go a long way in helping you budget … and there are plenty of monthly dividend stocks that pay out substantial yields.
For investors in or near retirement, adding at least a little exposure to monthly dividend stocks is a no-brainer.
We take a look at four of the best.
Monthly Dividend Stocks: Inland Real Estate Corporation (IRC)
Dividend Yield: 5.2%
Owning 132 different properties, Inland Real Estate Corporation (NYSE:IRC) is one of the Midwest’s largest owners and operators of community, neighborhood, power and lifestyle shopping centers as well as triple-net single-tenant retail buildings. Currently, roughly 77% of Inland’s tenants are national retail chains, and the bulk of its properties are anchored by a grocery store, major drugstore or a discount chain.
That focus on “necessity” over flash has helped IRC score an enviable leased occupancy rate of more than 95%.
This security, as well as Inland’s status as a pass-through real estate investment trust, or REIT, doesn’t hurt either.
Since rebounding from the Great Recession, IRC has paid a clockwork-like monthly dividend of 4.75 cents per share. At today’s prices, that works out to be a juicy 5.2% dividend yield. And while Inland has stuck with that payment for a while, the company recently made some moves to “trim the fat” from its property portfolio and plow those profits back into better growth opportunities — including high-growth, high-income regions of the south.
Whether that translates into better share appreciation or a bigger payout, either way, IRC is among the better monthly dividend stocks to own.
Monthly Dividend Stocks: Shaw Communications Inc (USA) (SJR)
Dividend Yield: 4.3%
The telecommunications sector has historically been a great place for investors looking for dividend stocks. Predictable fixed costs and customer bill payments and demand allow the telecoms to pay out big, reliable dividends.
But while AT&T Inc. (NYSE:T) and Verizon Communications Inc. (NYSE:VZ) pay out handsome dividends, they only do so quarterly. Those looking for monthly dividend stocks in telco should break out their passports and head north.
Canada’s Shaw Communications Inc (USA) (NYSE:SJR) provides cable, phone and high-speed internet services to more than 3.2 million customers and operates one of the largest TV networks in Canada. And as one of the largest telecom firms in Canada, Shaw generates some pretty hefty cash flows from its operations — cash flows that trickle down into SJR’s dividend payments, including an 8% increase back in January.
The current pullback in SJR might be a golden buying opportunity. After failing to meet analysts’ expectations for the first quarter of the year, SJR stock has slid around 15% in 2015 to reach 52-week lows. Now, you can buy SJR for just 12 times forward earnings, and at a yield of 4.3%.
Monthly Dividend Stocks: Main Street Capital Corporation (MAIN)
Dividend Yield: 6.8%
Many investors tend to ignore the lucrative but absolutely boring realm of businesses development companies. BDCs will loan cash to mid-sized firms — companies too big to ask the local bank for a loan, but not big enough to launch a significant bond offering — at competitive rates.
Investors should care because BDCs are set up as pass-through entities much like REITs, and similarly must pay out at least 90% of their earnings as dividends.
And if you’re looking for monthly dividend stocks in the BDC space, Main Street Capital Corporation (NYSE:MAIN) fits the bill.
Main Street Capital has been able to increase its dividend since its 2007 IPO, with the latest payout growing by 6%. More impressively, had you invested in MAIN stock when it went public, you would have gotten nearly all of your investment back in the form of dividends. Main Street Capital went public at $15 per share, and has paid $14.27 out in cumulative dividends.
Driving that dividend growth has been MAIN’s loan portfolio. Loans to smaller firms — which carry higher interest rates — have help pad Main Street Capital’s bottom line. For the latest quarter, the firm managed to see higher revenues and profits, too, which hopefully will translate into even more dividend increases.
Monthly Dividend Stocks: Goldcorp Inc. (USA) (GG)
Dividend Yield: 3.1%
Gold is pretty hated right now — prices for the precious metal haven’t really gone anywhere but down since peaking back in 2011. As a result, many gold mining stocks have been taking it on the chin.
Senior gold producer Goldcorp Inc. (USA) (NYSE:GG) is no exception, though that share pain has pushed its dividend yield to more than 3%.
And if you are going to buy a gold miner in this low-price environment, it should be one of the lowest-cost producers in the sector — a company that can survive until the yellow metal rebounds. Goldcorp expects all-in-sustaining costs to remain between $875 and $950 per ounce this year, down from last year’s numbers.
Additionally, the firm expects to generate significant free cash flows now that two of its new major low-cost projects have started up. That should help strengthen Goldcorp’s best-of-breed balance sheet. And should gold actually bounce off the bottom, that’s just extra gravy for GG stock holders.
If you’re going to own a gold miner, there are few better names out there than Goldcorp.
As of this writing, Aaron Levitt did not hold a position in any of the aforementioned securities.