Need monthly income?
Ever since the Great Recession, low interest rates have forced many savers to consider dividend-paying stocks. The problem is that most companies only make payments once every three months. That can make it hard to manage monthly bills with quarterly income.
Thankfully, some firms have recognized the value of delivering dividends on a more frequent basis. Investors can now pick between many companies that pay distributions monthly, which makes things easier from a budgeting standpoint.
With that theme in mind, let’s take a look at some of my favourite stocks that crank out monthly income.
1. Student Transportation Inc
In 1997, Dennis Gallagher had a simple goal: build the number one student transit company on the continent.
Less than two decades later, Gallagher’s firm, Student Transportation Inc (TSX:STB)(NASDAQ:STB), has become a huge success. Today, the company is the third-largest school bus operator in North America, with over 9,000 vehicles serving hundreds of counties.
This business doesn’t take a Ph.D. to understand, but that’s exactly why I love it. Children don’t stop going to school during a recession. And with over 200 lucrative municipal contracts, Student Transportation has been able to lock in revenues for up to eight years.
That has translated into a predictable stream of income for shareholders. Today, the stock pays out five cents per share each month, which comes out to an annual yield of 7.8%.
Don’t bet against this company. I expect that payout to grow as Student Transportation continues its march to number one in the industry.
2. Crescent Point Energy Corp
Over the past decade, Crescent Point Energy Corp (TSX:CPG)(NYSE:CPG) has grown from a tiny upstart into one of the largest energy companies in Canada.
In 2003, Chief Executive Scott Saxberg started the firm by buying up unpopular oil leases. Through a series of smart acquisitions, he has assembled a remarkable portfolio of shale assets. Since its inception, Crescent Point’s oil production has soared more than tenfold and early investors have made fortunes.
The firm’s best days might still be ahead. Crescent Point has done a great job squeezing more barrels out of old wells through new drilling techniques. As a result, the company is gushing cash flow and currently yields more than 9.2%.
Of course, whenever a stock’s yield gets so high, you have to wonder if the dividend is at risk. That said, Crescent Point locked in prices for most of its future production long before oil started plunging. The price of crude would have to fall below US$45 per barrel—and stay there for a few months or so—before management would even consider a dividend cut.
3. Medical Facilities Corp.
Medical Facilities Corp (TSX: DR) is an ex-income trust that owns six surgical centres throughout California and the Midwest. But what the company lacks in an original name, it more than makes up for through income.
Here’s what I like about this business: people don’t stop getting sick just because the economy takes a downturn. That means the company’s cash flows are as steady as bond coupons.
For shareholders, this has translated into dependable dividends. Unlike many ex-income trusts, the firm maintained its payout after converting to a corporation in 2011. As a result, this stock delivers a hearty nine cents per share each month, which comes out to an annual yield of 5.8%.
