Get Paid Monthly: 3 More Stocks and Funds To Buy

Source: Thinkstock

Source: Thinkstock

Recently I published an article highlighting four stocks and funds that pay monthly dividends to investors. They included:

  1. Realty Income (NYSE:O)
  2. Franco Nevada Gold (NYSE:FNV)
  3. The SPDR Dow Jones Industrial Average ETF (NYSEARCA:DIA)
  4. The Global X Super Dividend ETF (NYSEARCA:SDIV)

All of these stocks and funds make monthly distributions. The high frequency distribution of the two stocks that I mention speaks to the financial strength and consistency of their businesses. More generally these funds distribute income on a timeline that fits many people’s schedules. We get a lot of our bills, pay our rent or mortgage, and receive credit card statements on a monthly basis. Investors who need monthly income therefore benefit by being paid monthly by the four stocks and funds mentioned above.

In what follows, I provide investors with three more ideas.

1. The Credit Suisse Silver Shares Covered Call Exchange Traded Fund (NASDAQ:SLVO)

Silver, precious metals

This is a great fund for investors looking for income but who want to own an asset — silver — that is not correlated with most stocks and bonds. This fund is designed to buy silver futures and to sell call options against them. This means that the fund is generating income from its silver holds. Its trailing yield is enormous — 17.5 percent. This is because silver is a volatile asset, and options contracts trade at a premium to reflect this volatility.

As great as this sounds there is a downside, namely that if the price of silver soars, you don’t get to participate as an SLVO shareholder. This is because a call option gives the owner the right to buy silver from the seller at an agreed upon price. So long as silver trades lower, remains flat, or rises very slowly you will get exposure to the silver price and a hefty monthly payment, but if silver rises you will miss out. Therefore, if you are bullish of silver, a good strategy would be to buy SLVO and to also buy a silver mining company such as First Majestic Silver (AG), which will leverage your silver exposure.

2. Baytex Energy Partners (NYSE:BTE)

 

Source: Thinkstock

Source: Thinkstock

Baytex Energy Partners is a Canadian-based oil and gas producer that produces oil and gas in Canada, the northwest United States, and more recently the Eagle Ford shale region in Texas. It has a share price of about $42 and it pays investors $0.22 per month giving it a nearly 6 percent yield. The company has seen its share price fall over the past couple of years, but it is finding a bottom, and it looks as if it is breaking out as the oil price remains strong.

The company has a long track record of growing production — over the past seven years it has grown production at around 7 percent per year compounded. Given the troubles we are seeing in the Ukraine and given Russia’s dominant role in the oil market (it is the world’s largest oil producing nation), now is a good time to add some oil to your portfolio, and Baytex is an excellent way to do it, given its growth, its recent share price weakness, and of course, its dividend.

3. The AdvisorShares Pertius High Yield ETF (NYSEARCA:HYLD)

Source: Thinkstock

Source: Thinkstock

There are a lot of bond funds out there that are making monthly payouts, but I think this is the best. This is a small actively managed high yield bond fund. Because it is small it is not limited by its size. It can buy bonds in relatively small companies that a large bond fund cannot because for these funds a few million dollars-worth of bonds is too small to even consider.

The Pertius High Yield Bond Fund can buy bonds in smaller companies that have high yields because they aren’t well known and not because they are poor credit risks. As a result it can exploit market inefficiencies and generate value for its shareholders. Its managers ability to do this is reflected in the outperformance of HYLD versus larger, index-based high yield bond funds such as the SPDR Barclays Capital High Yield Bond Fund (NYSE:JNK), which has underperformed HYLD by nearly 4 percent over the past year if you count both capital appreciation and payouts. Four percent is a lot in the bond market, and it makes the 1.25 percent expense ratio worthwhile. This fund pays monthly dividends and it has a 7.5 percent yield, and it is a must-own for income investors.

Disclosure: Ben Kramer-Miller is long the Advisor Shares Pertius High Yield Fund.

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