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Retirees: How You Can Earn $700 a Month in Dividends With Less Than $100k in Savings

Dividend stocks can provide investors with a great source of cash flow, especially at retirement. Ideally, you’ll want to save as much as possible to maximize your income in your non-working years, but I’ll show you how having just $75,000 to invest could yield you over $700 a month. The three stocks below are good investments that pay high dividends and issue payouts on a monthly basis.

AltaGas Ltd.  (TSX:ALA) pays investors a very high 8.8% yield, and while some people might be concerned that payouts are too high to be sustainable, a big reason why that yield has grown so high is that over the past year, the share price has declined 20%. The company even raised its payouts last year, and in five years dividend payments have grown from $0.12 a month to $0.1825 for an increase of 52% and a compounded annual growth rate (CAGR) of 8.7%.

This dividend will likely continue to rise over the years, but even at the current rate, if you were to invest $25,000 in AltaGas stock today, you would be earning ~$180 a month in dividends. The stock also has a lot of upside, as many oil and gas stocks are overdue for a recovery, particularly as oil prices continue to climb, so you could also benefit from significant capital appreciation as well.

Corus Entertainment Inc.  (TSX:CJR.B) has had a rough year so far in 2018 with its share price being cut in half since the start of the year. The company’s monthly payments of $0.095 now provide investors with a yield of 18.8%, which is simply unheard of. This stock is certainly going to be seeing flags raised about its payouts, but if we look at the company’s cash flow, it doesn’t appear to be a big problem.

In the trailing 12 months, Corus has accumulated $320 million in free cash flow, and dividend payments have been less than half that amount. Despite a poor Q1 result that started the decline back in January, Corus still has very good fundamentals that make it a good long-term investment.

Investing another $25,000 in Corus would provide you with $390 every month in dividend payments.

First National Financial Corp.  (TSX:FN) will give your portfolio a third industry to invest in and collect dividends from. The company currently pays investors a dividend of 6.8%, and while it may be the smallest of the one on this list, last year First National paid out a special dividend as well. While there’s no guarantee that will happen again, it’s a sign of the company’s willingness to reward shareholders with strong payouts.

Like AltaGas, First National also has grown its payouts very well over the years. Since 2013, dividend payments have grown by 32% for a CAGR of 5.7%. A $25,000 investment here would net you another $140 in monthly dividends.

Summary

In total, investing $25,000 in each of these three stocks would net you a monthly dividend of $710 a month, and that could increase if payouts are hiked. While there’s no guarantee that any of these dividends won’t be cut, the companies listed here have good fundamentals and should provide investors with great long-term returns.

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Fool contributor David Jagielski owns shares of ALTAGAS LTD. AltaGas is a recommendation of Stock Advisor Canada.

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