For a very long time, I’ve gotten up in the morning and gone to a workplace of some kind in an effort to trade my time, energy, and effort to receive financial compensation in return. One of the first jobs I had paid me on a daily basis. It was simple: I showed up and worked and got paid. As time moved forward, however, it became the norm to get paid on a bi-weekly basis, which just wasn’t as much fun.
In investing, the norm is for investors to be paid on a quarterly basis; very few companies offer dividends on a monthly basis. Although the yield, calculated as dividends/share price, is not going to change on an annual basis, the reality is that getting paid on a monthly basis has one substantial benefit: it keeps people engaged.
For investors seeking monthly income, the first name to consider is none other than Inter Pipeline Ltd. (TSX:IPL), which is starting to look more attractive as the price of oil has started to increase once again. As of late, oil has crossed the US$71 mark. For those who have been investing for a very long time, there may be a recollection of the significance of this number. It was the old US$100!
The company charges a fee to move oil through its pipelines. There may be substantial revenue increases, as more producers will increase production and have greater quantities to move at these higher prices.
The second name on the list is Morneau Shepell Inc. (TSX:MSI), which has performed extremely well over the past year. In spite of offering only a 3% yield, investors have the opportunity to experience a raise. The company provides support and counselling services to employees in addition to retirement solutions to many corporations. Essentially, it is a growth business during a recession.
The final name on the list is Dream Office Real Estate Investment Trst (TSX:D.UN). At a current price of $24.50, Dream offers investors a yield of no less than 4% and has a share price that is backed by the real estate owned by the company. Barring a major rise in interest rates or complete debacle in the office rental sector, this name will be paying investors for a long time yet.
In spite of having many fantastic names that pay dividends on a monthly basis, investors may want to take a step further and consider not only the monthly dividend payers, but also the kinds of businesses these companies operate in. The reason these names are able to pay dividends every single month may be because they are in sectors that generate sticky and consistent revenues.