Are you looking to earn a regular paycheck without having to work for it, and you want it now? Then you need to invest $41,500 in these two ultra-high-yield stocks that give an annual yield of 7% and above. A 7% yield means $700 per year on a $10,000 investment. And if you don’t have that much cash in hand, you can build up over a period. These stocks’ share prices don’t fluctuate much. In fact, you can even use the dividend income to buy more shares instead of using your working income, making money out of money.
Invest $41,500 in these two ultra-high-yield stocks
The best monthly payers are real estate investment trusts (REITs), as they get monthly rental income that they distribute to unitholders. They operate on the trust model, and trusts should not retain income from the assets they hold. Otherwise, they will be charged the higher tax rate.
You will see a dividend-payout ratio of around 75-85% for REITs as they use the remaining cash flow to service debt and build new properties.
SmartCentres REIT with a 7% yield
SmartCentres REIT (TSX:SRU.UN) is a super-safe dividend payer, as 25% of its rental income comes from Walmart. The grocer is not only recession-proof but also acts as an anchor for other retailers to build shops around it. SmartCentres has been paying dividends for over two decades and survived the 2008 Financial Crisis and the pandemic without a dividend cut. It is because the management has been cautious in increasing dividends.
SmartCentres used the extra cash to intensify the property near their store by building commercial offices, apartments, and storage units to attract a crowd. During difficult times, like the pandemic, the REIT paused future developments and focused on sustaining current cash flow. When the housing market revived, it sold its residential inventory and used the money to reduce debt. It is gradually improving its payout ratio, which has touched 99% in the last two years.
Slate Grocery REIT with a 7.6% yield
Slate Grocery REIT (TSX:SGR.UN) is another Walmart landlord, but in the United States. Slate Grocery has a diversified tenant base with no tenant contributing more than 10% to rental income. The majority of the tenants are grocers and grocery-anchored stores. Slate Grocery has maintained its dividend per share. Still, you may see fluctuations because the dividend is paid in U.S. dollars, and Canadian investors get the dollar conversion.
Both these grocery landlords can give you an immediate payout.
How to earn $252 in monthly dividends from $41,500
If you buy 1,000 shares of each, you can get $3,030 in annual dividends. Since they are monthly payers, you can get $252 per month.
| Stock | Share Price | Dividend per Share | Dividend on 1,000 shares | Investment amount |
| Slate Grocery REIT | $15.42 | $1.18 | $1,180.00 | $15,420.00 |
| SmartCentres REIT | $26.11 | $1.85 | $1,850.00 | $26,110.00 |
| Total | $3,030.00 | $41,530.00 |
If you don’t need the dividend income in a particular month, you can buy more units. $252 can buy you either nine units of SmartCentres or 16 units of Slate Grocery REIT. That will add $16-$19 to your recurring annual dividend.
Even if you buy 100 units of each REIT every year, it will cost you around $4,200. In 10 years, you can have 1,000 units. Instead of procrastinating and thinking it’s not enough, start investing with whatever little amount you can. You will be amazed at how much you build over time without even feeling the pinch in your pocket.
