Your bills come monthly. Why not your dividend checks? These are some of 2021's best monthly dividend stocks and funds for easier income planning.
We're now in the final weeks of what has been the strangest
year in living memory. But while so much has changed in 2020, one thing remains
unquestionably the same: We still have bills to pay, and the vast majority of
those bills come on a monthly schedule.
This is where monthly dividend stocks come into play.
Most dividend stocks pay quarterly, and most bonds pay
semiannually. But monthly dividend stocks and funds have a payment schedule
that actually aligns with your mortgage payment, utility bills and other
monthly charges.
"We'd never recommend buying a stock purely because it
has a monthly dividend," says Rachel Klinger, president of McCann Wealth
Strategies, an investment adviser based in State College, Pennsylvania.
"But monthly dividend stocks can be a nice addition to a portfolio and can
add a little regularity to an investor's income stream."
2021 will hopefully look a lot different than 2020. With a
COVID vaccine expected to be broadly available within a few months, we should
see life returning to something a little closer to normal. All else equal, this
should help dividend payers and value stocks in general, which have really
struggled this year.
Today, we're going to take a look at 11 of the best monthly
dividend stocks and funds to buy in 2021. You'll see a few similarities across
the selection. Monthly payers tend to be concentrated in real estate investment
trusts (REITs), business development companies (BDCs) and closed-end funds
(CEFs). Many also tend to boast extremely high yields that are several times
greater than the market average.
That means this list isn't particularly diversified, and it
doesn't make a comprehensive portfolio. So you wouldn't want to completely
overload your portfolio in stocks that pay monthly dividends. But they can
certainly fill an important niche by delivering income stability.
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