See these three stocks with rock-solid businesses that will deposit a check into your bank account every month and then also give you a payraise every year. If you own any other monthly dividend stocks, consider switching them out with the three Tim Plaehn shares today. Income investors are naturally attracted to stocks that pay monthly dividends. Most U.S. based, dividend paying companies send out dividends on a quarterly schedule. For a lot of investors who have completed a working career and now rely on investment income, a monthly dividend check feels more natural. However, some companies take advantage of the appeal of the more frequent dividend schedule and do not work to generate competitive investment returns when compared to their quarterly paying peers. Avoid the trap of buying stocks just because they provide those monthly payments. Over the years, I have completed in depth analysis of hundreds of dividend paying companies. My overall impression of the majority of monthly dividend stocks is that they use the monthly payment hook as a smoke screen to cover less than impressive overall investment results. With so many disappointing returns from monthly dividend stocks, for me to add one to my recommendations list, one of these companies has to demonstrate significantly better investment potential compared to similar companies and stocks that pay quarterly. The business development company (BDCs) sector is home to a significant number of monthly dividend payers. Out of the approximately 50 publicly traded BDCs, about one-third pay monthly. This group is a good example of... Note: Tim Plaehn is the lead investment research analyst for income and dividend investing at Investors Alley. He is the editor for The Dividend Hunter and 30 Day Dividends. |
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