Dividend stocks typically pay you quarterly, which isn’t optimal if you want to generate consistent monthly income from your investments. But you can get around this by investing in stocks that pay out at different times during the quarter.
Three high-yielding stocks that can give you excellent dividend income are Innovative industrial properties (NYSE: IIPR), AT&T (NYSE:T)And Enbridge (NYSE: ENB). Because these stocks pay dividends in different months, investing in all three can result in monthly income for your portfolio. Here’s how much you want to invest in each of these stocks to create a monthly dividend stream of $200 per month.
Innovative Industrial Properties: $12,500
Innovative Industrial Properties (IIP) is a real estate investment trust focused on the cannabis industry. Although investing in cannabis stocks can be risky, IIP is a safer option because it is not involved in growing or selling cannabis itself. She does rent properties to growers. And the financial situation was quite healthy.
Last quarter, IIP reported fund from operations (FFO) per share of $1.98 for the period ended March 31, which was only slightly less than the $2.04 it reported in the same period last year. And that’s still higher than the quarterly dividend of $1.82. With the Drug Enforcement Administration (DEA) potentially reclassifying cannabis as a less dangerous substance, pot producers could be in a much better financial position, potentially paying less in taxes. That, in turn, could open up new growth opportunities for IIP.
Currently, the stock yields 6.4%, and a $12,500 investment in IIP could earn $800 per year in dividends, or $200 per quarter. IIP makes payments in January, April, July and October.
AT&T: $12,500
Telecom giant AT&T pays a similar yield to IIP and with a similar investment, this stock could also generate $200 in quarterly dividends. It makes payments in February, May, August and November.
AT&T’s return is a bit high, but it appears to be safe. The company’s financials are in good shape, as AT&T generated $2.1 billion more free cash flow in the first three months of the year compared to the same period in 2023. And the company is showing solid growth under less-than-ideal economic circumstances; for the seventeenth consecutive quarter, the company reported at least 200,000 net additions to its fiber operations. And it’s keeping customers happy as AT&T also reports the lowest first-quarter churn ever in its postpaid phone segment.
With the company trading at just 9 times earnings, investors could get a deal on what appears to be a safe dividend stock in AT&T.
Enbridge: $11,000
The highest-yielding stocks on this list come from Canadian pipeline company Enbridge. With a yield of 7.3%, you would need to invest just under $11,000 in this oil and gas stock to generate $200 each time it pays a dividend. It makes payments in March, June, September and December. Along with the other stocks on this list, you would receive dividend income every month of the year. And that would also bring your total investment in these three stocks to about $36,000.
In Enbridge you have a safer than average oil and gas supply. Enbridge has long-term contracts that give it much more stability than oil producers whose revenues can fluctuate widely depending on commodity prices. Last year, the company achieved its financial guidance for an impressive 18th year in a row.
Enbridge has proven to be a reliable investment over the years. And it’s a good start to 2024, reporting that discounted cash flow (DCF) rose 9% to C$3.5 billion (about US$2.56 billion) through the first three months of the year. DCF is what the company uses instead of net income to assess the safety of its dividend; If that goes in the right direction, it’s a good sign for income investors. Enbridge has increased its dividend for 29 years in a row, making it an ideal investment for buy-and-hold investors.
Should you now invest €1,000 in innovative industrial real estate?
Consider the following before purchasing shares in Innovative Industrial Properties:
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David Jagielski has no position in any of the stocks mentioned. The Motley Fool holds and recommends positions in Enbridge and Innovative Industrial Properties. The Motley Fool has a disclosure policy.
Want $200 in monthly dividends? Invest $36,000 in these 3 stocks, originally published by The Motley Fool
