Dividends are a very important part of an investor’s returns. Dividends could be a key part of paying for some or all of your expenses.
The problem is that dividends aren’t paid in even monthly, fortnightly or weekly amounts like wages are. Depending on what shares you have in your portfolio, you could have months during the year that you aren’t paid anything.
Perhaps the best way to counteract this is to have a variety of stocks that in total pay every month. The following five shares could create such a portfolio:
Rural Funds Group (ASX: RFF)
Rural Funds is an agricultural real estate investment trust (REIT) that invests in a wide variety of farmland including almonds, macadamias, cattle, poultry, cotton and vineyards.
The tenants pay regular rent which allows management to make a quarterly distribution to shareholders in January, April, July and October.
Rural Funds Group has a trailing unfranked dividend yield of 5.17%.
Generation Healthcare REIT (ASX: GHC)
Generation Healthcare is a REIT which focuses purely on owning healthcare buildings such as hospitals and aged care facilities. Healthcare is growing, yet defensive, so Generation Healthcare’s strategy seems to be a sound one.
It pays a distribution in February and August and currently has a trailing yield of 4.41%.
Class Ltd (ASX: CL1)
Class is a software provider to self-managed superannuation fund (SMSF) administrators. It’s steadily growing its market share of the SMSF market and could grow strongly in the next few years.
The users pay a regular subscription which allows Class to pay a quarterly dividend to shareholders in March, May, August and November.
Class is currently trading with a grossed-up dividend yield of 1.94%.
Whitefield Limited (ASX: WHF)
Whitefield is one of Australia’s largest and longest-running listed investment companies having been operating since 1923. It owns all the usual large blue chips like Commonwealth Bank of Australia (ASX: CBA) and CSL Limited (ASX: CSL).
Whitefield pays a half-yearly dividend in June and December and has a trailing grossed-up dividend yield of 5.37%.
Challenger Ltd (ASX: CGF)
Challenger is Australia’s market leading annuity provider and could benefit strongly in the decade ahead as more baby boomers reach retirement and want to create a source of reliable retirement income.
It pays a dividend in March and September. Challenger is currently trading with a grossed-up dividend yield of 3.88%.
The above five shares together create a portfolio that pays dividends every month.
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Motley Fool contributor Tristan Harrison owns shares of Challenger Limited, Class Limited, and RURALFUNDS STAPLED. The Motley Fool Australia owns shares of Challenger Limited and Class Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.