Updated on May 16th, 2022 by Bob Ciura
Note: Sure Dividend thank David Morris for providing the idea for this article.
When trying to construct a portfolio that will support financial independence – the ability to retire if you want to and live entirely from passive income – it is very helpful to be receiving dividend checks each month.
Creating a portfolio that generates dividends in every calendar month means investors will not have to go without income in certain months while they wait for the next quarterly, semi-annual, or annual dividend check.
Instead, investors will receive cash flow each month. While many stocks pay quarterly dividends, they do not all abide by the same schedule. This article explores three stocks that pay quarterly dividends, but do so on varying schedules, so that an investor who owns all three will receive one dividend payment in each calendar month.
Even better, all three stocks have high dividend yields above 5%.
You can download your full list of all 140+ securities with 5%+ yields below:
The most obvious and simple way to create a monthly passive income stream is to invest in monthly dividend stocks. While this could work, it also severely restricts your potential investment universe and therefore your ability to select high returning stocks. Furthermore, it may cause you to take on excessive risk and even suffer dividend cuts as you seek to achieve diversification within such a restricted pool of stocks.
We believe a far better way of achieving a monthly dividend cash flow stream is by diversifying across dividend paying stocks that issue their payouts in complementary quarters such that dividend checks pour in during each month of the year. This way, investors can invest across a much larger universe of stocks while still reaping the benefits of receiving monthly dividends.
In the rest of this article we will highlight our top three picks that will combine to provide a fairly stable and diversified stream of monthly dividends alongside strong total return potential.
January/April/July/October: Altria Group (MO)
- Dividend Yield: 6.7%
Altria Group was founded by Philip Morris in 1847. Today, it is a consumer staples giant. It sells the Marlboro cigarette brand in the U.S. and a number of other non-smokeable brands, including Skoal and Copenhagen.
The flagship brand continues to be Marlboro, which commands over 40% retail market share in the U.S.
Source: Investor Presentation
Altria also has a 10% ownership stake in global beer giant Anheuser-Busch InBev, in addition to large stakes in Juul, a vaping products manufacturer and distributor, as well as cannabis company Cronos Group (CRON).
On 04/28/22, Altria reported first quarter FY22 results. Adjusted diluted earnings-per-share increased 4.7% to $1.12 year-over-year. Net revenue stood at $5.9 billion, down by 2.4% mainly caused by the sale of the wine business in October 2021. Reported diluted earnings per share stood at $1.08, up by 40.3% year-over-year. Revenue decreased 1.2% to $4.82 billion year-over-year.
Meanwhile, Altria reported approximately $1.2 billion remaining under the company’s existing $3.5 billion share repurchase program which is expected to complete by December 31, 2022. The company also reaffirmed full-year 2022 adjusted diluted earnings-per-share guidance of $4.79-$4.93.
Altria has increased its dividend for over 50 years, placing it on the exclusive Dividend Kings list. It is also a Dividend Champion.
Click here to download our most recent Sure Analysis report on Altria Group (preview of page 1 of 3 shown below):
February/May/August/November: Kinder Morgan Inc. (KMI)
- Dividend Yield: 5.7%
Kinder Morgan is among the largest energy companies in the U.S. It is engaged in storage and transportation of oil and gas, and other products. It owns an interest in or operates approximately 83,000 miles of pipelines and 144 terminals. Its pipelines transport natural gas, refined petroleum products, crude oil, carbon dioxide (CO2) and more.
Kinder Morgan’s transportation assets operate like a toll road, whereby the company receives a fee for its services, which generally avoids commodity price risk. Approximately 90% of Kinder Morgan’s cash flow is fee-based.
Source: Investor Presentation
On April 20th, 2022 Kinder Morgan reported its first-quarter financial results. Net income attributable to KMI stood at $667 million, down from $1.41 billion year-over-year. Distributable cash flow decreased to $1.46 billion from $2.33 billion in the year-ago period. Adjusted earnings fell to $732 million from $1.37 billion in the year-ago period.
Revenue decreased 17.7% to $4.29 billion year-over-year. The company’s natural gas transport volumes increased 2% year-over-year, total refined product volumes increased 7% year-over-year, and crude and condensate pipeline volumes decreased 4% year-over-year.
Meanwhile, for the FY2022, Kinder Morgan expects to generate a net income attributable to KMI of $2.5B and declare dividends of $1.11 per share, distributable cash flow of $4.7B, and adjusted EBITDA of $7.2B and aims to end 2022 with a 4.3x net debt-to-adjusted EBITDA ratio.
Click here to download our most recent Sure Analysis report on Kinder Morgan (preview of page 1 of 3 shown below):
March/June/September/December: Simon Property Group (SPG)
- Dividend Yield: 5.8%
Simon Property Group is a real estate investment trust (REIT) that was formed in 1993. The trust focuses on retail properties, mainly in the US, with the goal of being the premier destination for high-end retailers and their customers. The trust has interests in 232 different properties that amount to 186 million square feet of leasable space. Simon produces about $4.5 billion in annual revenue.
On February 7th, 2022, Simon reported its Q4 earnings for the period ending December 31st, 2021. Total revenues were $1.33 billion, 17.21% higher versus the comparable period last year. Higher revenues were powered by a recovery in retail real estate and Simon’s developments through 2021, including executing over 15 million square feet of leases, completing five significant domestic redevelopments, opening two new international shopping destinations, and substantially increasing the profitability generated from its other platform investments.
As a result of higher revenues and the absence of one-off expenses that took place last year, FFO per share jumped by 42.4% to $3.09. Portfolio NOI, which includes domestic properties, international properties, and Simon’s investment in Taubman Realty Group, increased by 22.3% compared to the prior-year period, which means that Simon’s massive acquisition has started to bear fruits. Overall occupancy stood at 93.4% compared with 92.8% at the end of Q3.
Following a strong year compared to 2020’s depressed results, management shared its initial FY-2022 outlook, expecting FFO in a range of $11.50 to $11.70.
Click here to download our most recent Sure Analysis report on Simon Property Group (preview of page 1 of 3 shown below):
These three stocks pay us an average dividend yield above 5% along with attractive growth prospects while also providing us with a fairly consistent dividend check every month of the year.
They also enjoy broad diversification across the tobacco, energy, and real estate industries. As this article illustrates, it is very possible to build a diversified and attractive monthly income stream without necessarily just investing in monthly dividend stocks, many of which are highly risky.
Additionally, the following Sure Dividend databases contain the most reliable dividend stocks in our investment universe:
- The Dividend Contenders List: 10-24 consecutive years of dividend increases.
- The Dividend Challengers List: 5-9 consecutive years of dividend increases.
- The Dividend Aristocrats List: S&P 500 stocks with 25+ years of dividend increases.
- The Highest-Yielding Dividend Aristocrats: The top 20 Dividend Aristocrats with the highest current yields.
- The Dividend Achievers: dividend stocks with 10+ years of consecutive dividend increases.
- The Dividend Kings: considered to be the ultimate dividend growth stocks, the Dividend Kings list is comprised of stocks with 50+ years of consecutive dividend increases.
- The Highest-Yielding Dividend Kings: The top 20 Dividend Kings with the highest current yields.
- The Complete List of Monthly Dividend Stocks: stocks that pay dividends each month, for 12 payments over the year.
- The Highest-Yielding Monthly Dividend Stocks: the 20 monthly dividend stocks with the highest current yields.
- The Blue Chip Stocks List: this database contains stocks that qualify as either Dividend Achievers, Dividend Aristocrats, or Dividend Kings.
Finally, please see the links below to our articles and spreadsheets on dividends stocks for each calendar month: