Investors who are chasing regular passive income will love the idea of an ASX dividend stock that pays out money to its investors every single month.
These shares aren't easy to find. Most dividend-paying stocks pay their dividends once or twice per year.
I've written before about how listed investment company (LIC) Plato Income Maximiser Ltd (ASX: PL8) is an ASX investor's dream, but there is another great monthly-paying stock I think is worth keeping an eye on.
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The BetaShares Dividend Harvester Active ETF (ASX: HVST)
HVST is an ASX exchange-traded fund (ETF). As an ETF, the stock represents a portfolio of underlying dividend shares and is constructed in a way that allows the fund to own a dividend share until it trades ex-dividend. At this point, the share is sold to fund the purchase of its next dividend share.
The share portfolio is rebalanced approximately every three months, with the aim of including the shares that are expected within the next rebalance period. In order to increase security diversification, HVST also holds an allocation to broad sharemarket exposures through an ETF. The process is known as 'dividend harvesting'.
The fund's share portfolio is generally selected from the largest 100 Australian shares on the ASX, screened for high dividend and franking outcomes based on expected future gross dividend payments.
Its portfolio allocation is weighted towards the financial sector (35.9%), with materials stocks accounting for another 19.5%.
Some of its current holdings include BHP Group Ltd (ASX: BHP), National Australia Bank Ltd (ASX: NAB), Wesfarmers Ltd (ASX: WES), and CSL Ltd (ASX: CSL).
What does the ASX dividend stock pay out?
HVST provides a regular, franked dividend income that is at least double the annual income yield of the broader ASX. Its 12-month gross distribution (dividend) yield is 7.3%, and the net yield is 5.6%. The franking level is 67.5%. The annual management fee and cost is 0.72%.
Since inception on 1 June 2022, HVST ETF has delivered an average annual gross total return of 11.34% and a net return of 9.02%.
HVST has paid investors $0.0652 per share for the past three months, up from $0.0648 since January. In October to December last year, the ETF paid $0.0665 per share. This equates to an annual running total of $0.7822 per share fully franked.
At the close of the ASX on Thursday, HVST shares were $14.15 each, which is 2.39% higher over the year.
