Finding the right mix of investments for your portfolio takes patience and time. What investors don’t often think about, is how those investments will provide a steady source of recurring income during retirement. Dividend-paying stocks are great, but a quarterly distribution can make budgeting difficult. Fortunately, there is hope! Here are two great stocks to consider that pay monthly dividends.
A diversified stock with a monthly income stream
Winnipeg-based Exchange Income Corporation (TSX:EIF) is a stock that not all investors will recognize, at least initially. Exchange Income owns over a dozen smaller subsidiaries that fall under aviation and manufacturing segments.
All of those subsidiaries offer a specialized product or service that falls into a unique niche where competition is minimal, but the business is necessary. Prime examples of this include cell-phone tower construction, metal fabrication services, and airline services that connect to Nunavut from Manitoba and Ontario.
Those businesses generate revenue for the parent company, which in turn provides investors with a handsome monthly income. The current distribution works out to a generous 5.80% yield, making it one of the better-paying returns on the market.
The combination of running a well-diversified business along with a juicy yield makes Exchange a must-have stock among any list of stocks that pay monthly dividends.
Not all telecoms pay dividends on a quarterly basis
Shaw Communications (TSX:SJR.B)(NYSE:SJR) is neither the largest or most known of Canada’s telecoms. Apart from being on this list of stocks that pay monthly dividends, Shaw offers investors several compelling reasons to invest.
First, let’s mention the defensive appeal. Telecoms such as Shaw provide wireline, TV, internet, and wireless service to subscribers. Those subscribers provide the telecom with a stable, if not growing source of revenue. The importance of those services has only grown in the past year since the pandemic began. This only adds to the already lucrative defensive appeal of telecom stocks such as Shaw.
The second point relates to Shaw’s wireless segment. The company’s wireless segment launched only a few years ago but has already been established as the fourth-largest player in Canada. Specifically, Shaw positioned itself as a true alternative to its three larger peers, by offering aggressive pricing and generous allowances.
Those efforts haven’t gone unnoticed. Earlier this year Shaw was approached with a multi-billion dollar offer from one of those larger peers. Note that the purchase still needs to clear the expected regulatory and anti-trust approvals, which could be a year or more out still. Assuming that the deal pans out, the offered price for Shaw’s shares is still significantly higher than the current stock price.
In other words, not only does Shaw offer a juicy 3.33% yield today, but the shares are still discounted over where they could end up if the deal is approved.
These stocks pay monthly dividends — will you invest?
Both Shaw and Exchange offer investors a healthy monthly income. Additionally, both stocks operate in unique segments of the market that provide some defensive appeal. While no stocks are without risk, both Shaw and Exchange are great options for long-term income and growth.
Buy them, hold them, and earn income each and every month.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Fool contributor Demetris Afxentiou owns shares of Shaw Communications. The Motley Fool has no position in any of the stocks mentioned.