3 Monthly Dividend Stocks Every New Investor Needs

Looking for a reliable income source? These monthly dividend stocks won’t sacrifice future growth but do offer a juicy income.

One of the most intriguing aspects of any portfolio is the presence of monthly dividend stocks. Despite being rare gems to the market, there are several enticing options for both seasoned and new investors to consider.

Here’s a look at some of them.

A well-diversified, unique option to consider

Most investors aren’t aware of Exchange Income Corporation (TSX: EIF). That’s a shame, because Exchange is a stellar investment that should be on the radar of investors everywhere. Exchange owns over a dozen subsidiary companies. Those subsidiary companies comprise aviation and manufacturing segments.

Across both those segments, the subsidiaries have several key points in common. They all provide a necessary function where there is a constant, if not growing demand. They also boast a unique niche factor in that there is little competition for those in-demand businesses.

By way of example, some of the businesses include providing passenger and cargo services to Canada’s north. On the manufacturing side, examples include cell tower construction and unique window-wall units used in residential towers.

As a result, those niche businesses are able to generate a cash flow for Exchange. In turn, those earnings come back to investors in the form of a juicy monthly dividend.

That monthly dividend works out to a yield of 5.42%. Prospective investors should also note that like most monthly dividend stocks, Exchange does provide bumps to that dividend.

Grab this monthly dividend payer while you still can

Canada’s telecoms are great long-term investments for both growth and income-seeking investors. Unfortunately, all but one of those telecoms provide quarterly dividends to investors. The exception is Shaw Communications (TSX: SJR.B)(NYSE: SJR).

Shaw is the smallest of the big telecoms. The pure-play telecom provides the usual bevy of subscription-based services. Shaw’s coverage is primarily focused on the western part of the country. Additionally, Shaw’s wireless segment is newer and much smaller than that of its larger peers.

Shaw is also in the process of being acquired by one of its larger telecom peers. That deal is not expected to close for some time still, as regulatory and anti-competition concerns are addressed.

Until then, investors can take in the 3.48% yield on offer. Finally, if that deal does come to fruition, investors can pocket the difference in the currently discounted stock price.

Renewable energy is huge

One of the most lucrative long-term options for investors is renewable energy. TransAlta Renewables (TSX: RNW) is an intriguing option for prospective investors that long for one of those sought-after monthly dividend stocks.

TransAlta boasts an all-renewable portfolio of facilities that are located across Canada, the U.S., and Australia. This translates into three unique opportunities for prospective investors.

First, TransAlta adheres to the same lucrative business model that its fossil fuel-burning peers follow. In other words, TransAlta has long-term regulatory contracts that provide the company with a reliable and recurring revenue stream.

Second, let’s talk about transition costs or, more specifically, a lack of them. TransAlta does follow the same business model as fossil fuel-burning peers, but there’s one key difference. TransAlta isn’t straddled with the huge transition costs that traditional utilities are dealing with. Instead, the company can (and does) invest in growth initiatives to expand its network.

Finally, there’s that monthly dividend. TransAlta offers a yield of 5.48%, making it one of the better-paying investments on the market. It also means that a $40,000 investment will earn a monthly income of just shy of $2,200.

Will you buy these monthly dividend stocks?

No investment is without risk, and that includes the three stocks mentioned above. Fortunately, the above investments cater to different segments of the market, and all have promising long-term growth prospects.

In my opinion, one or more of these monthly dividend stocks should be part of every well-diversified, long-term portfolio.

Fool contributor Demetris Afxentiou has positions in Shaw Communications. The Motley Fool has no position in any of the stocks mentioned.

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