Thursday, August 16, 2007

Top 350 Monthly Dividend Stocks

There are over 350 stocks which pay their dividends monthly. Conservative investors love these investments for several reasons: they get their return of capital back faster, they can compound faster, the income coincides with their monthly expenses, they are more liquid than individual corporate or municipal bonds, there is no minimum investment allowing them greater diversification, and there is the potential for capital appreciation for some of these stocks. To get a downloadable list of all the monthly dividend stocks that you can open in Excel which you can sort, add to, delete from, or change, go to WallStreetNewsNetwork.com.

There are some caveats you should be aware of. For purposes of this article, it is assumed that exchange traded funds [ETF’s], real estate investment trusts [REIT’s], and Canadian oil income royalty trusts are considered stocks. Dividends are always subject to change and reduction, including changes in payment schedules from monthly to quarterly. The principal can also drop, by even more than the amount of the income received. The information on these stocks was gathered over the past couple weeks, so obviously some yields have changed during that time frame. Some of these stocks are extremely speculative, and high yield does not mean safe. The Canadian royalty trusts have special tax issues that you should be aware of, especially if you are planning on putting them in a retirement plan. A Canadian law which goes into effect in 2011 can affect the price and income of the Canadian stocks.

Remember, these are monthly dividend stocks, in case you are wondering why your quarterly dividend stock does not appear on the list. I’ve extracted the top eight from the list, including the highest yielding from various categories, such as tax-free, real estate oriented, and Canadian royalty trusts.

At the top of the list, in terms of yield, and probably in terms of risk, is the RMK Strategic Income Fund (RSF), which yields 24.9%. This is a closed end fund which is extremely speculative due to its portfolio holdings which include home equity loans, commercial loans, franchise loans, equipment leases, manufactured housing, common stocks, collateralized debt obligations, certificate-backed obligations, and collateralized mortgage obligations. The company has been paying 14 cents per month for the last nine months, down from 15 cents per month last year. I personally don’t think the dividend is sustainable.

Pengrowth Energy Trust (PGH) is the highest yielding monthly Canadian oil royalty income trust, with a yield of 16.2%. They own and operate interests in oil and natural gas properties in Canada. They have increased their monthly dividend for the last two months and the dividend is the highest it has ever been in the last three years. The price earnings ratio, for what it is worth, is 13.6.

The highest yielding monthly growth and income fund is Boulder Growth & Income Fund Inc. (BIF), which yields 14.1%. This CEF invests in common stocks in both the U.S. and outside the U.S., warrants, corporate bonds, treasury bills, and repurchase agreements. It was founded in 1972 and is co-managed by Boulder Investment Advisers and Stewart Investment Advisers.

Neuberger Berman Real Estate Securities Income Fund Inc. (NRO) is the highest yielding monthly real estate CEF, as opposed to a REIT. The fund, with yields 13.6%, invests in real estate investment trusts and other real estate stocks. They have paid their dividend monthly since their inception in 2003 and recently raised their dividend in May of this year.

The highest yielding American royalty trust is Mesa Royalty Trust (MTR), with a yield of 13.2%. Mesa, which is based in Austin, Texas, owns oil and gas royalty interests in Kansas; New Mexico, Colorado, and Wyoming. The have been paying monthly dividends since 1988.

The top yielding monthly bond CEF is the New America High Income Fund Inc. (HYB), which yields 12.8%. Their portfolio holds below investment grade corporate bonds. They have paid monthly dividends since April 1988.

The highest yielding convertible fund is the Calamos Convertible Opportunities & Income Fund (CHI), which generates a yield of 11.7%. They invest in convertible bonds and regular bonds of all ratings. They have paid their monthly dividends since August 2002.

BlackRock Municipal Income Trust (BFK) is the highest yielding municipal bond CEF, with a 6.8% yield. It invests at least 80% of its portfolio in municipal bonds that are investment-grade quality and up to 20% in lower grade munis. It has paid monthly dividends since September of 2001.

Author does not own any of the above.

By Fred Fuld at Stockerblog.com.

1 comment:

socal said...

PGH has not increased its distribution. The 'increase' you see is due to the fluctuation of the US dollar vs. the Canadian dollar. The distribution has been static at .25 Canadian since Oct '05.

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