There aren't too many ASX dividend stocks on the ASX boards that pay investors every single month.
Rather, the norm for the vast majority of income stocks is to provide their investors with a paycheque every six months. Getting your dividends twice a year may be okay for some investors. But others would probably enjoy the certainty of a monthly salary.
Of course, you do have the option to invest in monthly dividend payers directly. But, as we mentioned earlier, these are nearly as rare as rooster eggs on the ASX. Some options include Plato Income Maximiser Ltd (ASX: PL8), BetaShares Dividend Harvester Fund (ASX: HVST) and Metrics Master Income Trust (ASX: MXT).
But let's say none of these monthly ASX dividend stocks appeals to you. What's an investor to do?
Well, one path is to compile a concentrated portfolio of high-quality ASX dividend stocks. If you choose the right shares, you can be assured of a dividend paycheque (almost) every month of the year.
Here's how I would do it, using shares that are all under $50 each.
Building a monthly income portfolio
Firstly, I would spend an equal amount on each of the following ASX dividend stocks:
- Transurban Group Ltd (ASX: TCL)
- Telstra Group Ltd (ASX: TLS)
- Woolworths Group Ltd (ASX: WOW)
- Brickworks Ltd (ASX: BKW)
- National Australia Bank Ltd (ASX: NAB)
- Vanguard Australian Shares Index ETF (ASX: VAS)
In my opinion, these six investments provide ASX income investors with a balanced, but diversified group of quality shares that you can reasonably expect reliable income from.
Toll-road operator Transurban is a company that has serious inflation protection mechanisms built into its earnings base and offers a dividend yield well over 4% today.
Telstra is another defensive share with phenomenal market share in its telecommunications space. It has a fully-franked dividend yield of over 4% today.
Woolworths is a consumer staples giant that also offers significant inflation protection and an earning base that can be relied upon during both booms and recessions. Its fully-franked dividend yield is presently sitting at just under 3%.
Brickworks is another diverse company that effectively offsets the cyclicality of its construction materials business with a robust portfolio of property and stocks. It hasn't hit investors with a dividend pause or cut since the 1970s, and today offers a fully franked dividend yield of just over 2.25%.
NAB is a famous income-heavy hitter on the ASX. As a big four bank, it is a remarkably mature, stable and robust company that has a fully-franked dividend yield of just over 5.1% on the market today.
Finally, the Vanguard Australian Shares ETF is an index fund that allows ASX investors to indirectly buy into the largest 300 stocks on the ASX, all in one share. As such, its quarterly dividend typically reflects an average of all of the income that is produced on the Australian stock market.
Why these six ASX dividend stocks?
For one, I view these ASX dividend stocks as some of the best and most reliable income payers that the ASX has to offer. I would be happy to own all of them in my own personal portfolio (indeed, I own a few already).
But this particular selection has a bonus for investors too. Owning all six should give you a good shot at a dividend paycheque every month of the year, bar one.
Naturally, dividends can never be fully relied upon (as COVID proved). There's always a chance that a company might decline to pay a dividend in a certain half-year. It could also decide to move its payment day, which would disrupt the calendar you're about to see.
But I think there's a decent chance investors won't have to worry too much with these ASX dividend stocks.
Starting with January, investors will be in line to receive the first of the Vanguard Australian Shares ETF's dividend distributions.
February will then see Transurban fork out its own payment. March has Telstra's interim dividend, with Woolworths following in April, and Brickworks in May.
In July, NAB usually forks out one of its dividends, with Transurban coming in with its second in August.
September is a big month, with both Woolies and Telstra dropping their second payments.
October is another VAS month, while November will see Brickworks round out its dividends for the year.
Finally, NAB typically gives its shareholders an early Christmas present in December when its second dividend leaves the company doors.
So with just six ASX dividend stocks, each going for under $50 today, you can set up a near-perfect monthly dividend schedule.
June of course is the only outlier. So our investor might have to tighten the belt that month. But if they can get through June, there are 11 months of straight monthly paycheques to look forward to.
