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Tuesday, July 6, 2010

Top-Yielding Monthly Dividend Stocks

Many market-players seek shelter from volatility in dividend-paying stocks, which offer investors a stream of steady income that can ease the pain of wild gyrations in the markets. And stocks that pay monthly dividends provide regular, consistent income to investors with usually less volatility than quarterly-paying dividend stocks.

The key to owning stocks that pay monthly dividends rather than quarterly or annual dividend stocks is that your invested capital comes back to you and your money compounds much more quickly.
Lots of investors are looking for monthly dividend payments to supplement their income during retirement. Other preretirement investors love to buy stocks that pay them cash on a monthly basis to help offset their high-risk investments. No matter what type of investor you are, dividend-paying stocks can go a long way toward creating wealth.

Dividend-paying stocks can also help an investor sleep better at night, because they're usually deemed to be safer investments than stocks that don't pay dividends,  The number of stocks that now pay a monthly dividend tops over 250, including real estate investment trusts, oil income trusts, closed-end funds and other investment vehicles that own a portfolio of income-producing assets and distribute cash generated by these assets every month to investors.

Let's take a look at four monthly dividend-paying securities that look promising.

If you're bullish on the future for oil and natural gas, you might want to take a look at the Enerplus Resources Fund(ERF). This stock is an energy trust that controls operating subsidiaries to acquire, exploit and operate crude oil and natural gas assets. The company currently controls properties in red hot Marcellus Shale region in the northeastern U.S. Many industry insiders think the Marcellus Shale could be one of the most promising natural gas resources in the Appalachian Basin.
Enerplus Resources has the fifth-highest dividend yield of oil and gas production stocks, at 9.4%. The stock has near-term support around $20 a share and resistance at around $24.


If you think the real estate market is near a bottom, you should take a look at closed-end management investment company LMP Real Estate Income Fund(RIT), which invests in securities related to the real estate industry, tied to sectors such as office, health care, apartments, shopping centers and regional malls. Its current dividend yield is 8.7% This stock is trading near the 200-day moving average of $8.20 a share, which could offer a great entry point if you like the prospects of real estate here. If the 200-day doesn't hold, look for the next area of support to come in at around $7.75. The stock also has some overhead resistance at around $9 to $9.50.

Another name investors should take a look at is the MFS Multimarket Income Trust(MMT), a closed-end fund that maintains a portfolio of investments in high-yield and investment-grade corporate bonds, emerging market debt securities, U.S. government securities and international investment-grade debt securities. Considering how foreign debt markets have been rattled of late, this trust could offer a great opportunity to get in at depressed prices. The MFS Multimarket Income Trust has direct exposure to some of the PIIG nations, such as Ireland, Italy and Spain. The current dividend yield of the MFS Multimarket Income Trust is 8.2%. The stock is trading near the 50-day moving average of $6.46, and overhead resistance can be found at $6.60 to $6.70.


One last monthly-paying security to consider is the Calamos Convertible Opportunity & Income Fund(CHI), which is a diversified, closed-end management investment company. The fund seeks total returns through a combination of capital appreciation and current income by investing in a diversified portfolio of convertible securities and below-investment-grade high-yield fixed-income securities.
Calamos Convertible Opportunity & Income has offered a steady distribution since inception; it has a strong historical performance and is run by an experienced management team. Some of the securities it currently holds are common stock in Freeport McMoRan(FCX), corporate bonds in Vail Resorts(MTN) and convertible preferred stock in Bank of America(BAC). Corporate bonds make up 56% of the funds asset allocation, and energy is the heaviest-weighted sector. Its current dividend yield is 9.4%.


 Disclosure  NONE

3 comments:

  1. Haven't yu cansider investing in no US companies? I think it can be important in actual situation.

    ReplyDelete