Get Rich - Stay Rich - Investing for Monthly Income

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Monthly Dividend Stocks Beating the S&P 500

Comparison of monthly dividend stocks and ETFs to the S&P 500

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While dividend income is the hot item these days as the yield on fixed income investments is lower than income investors are seeking.  However, you do not want to give up some total return just to lock in a dividend.  The yield on the S&P 500 is only 2% and the price return has been 1% over the last year.  This creates a total return of 3% on the S&P 500. You should use this as the baseline for your income investments.  You can easily find monthly dividend stocks and ETFs that can beat the S&P 500 to make you even more money than just the monthly dividend.

Here are three monthly dividend stocks that have beaten the S&P 500 over the past year: (1) CRT, (2) MAIN and (3) UTG. The chart above shows the stock price returns compared to the S&P 500 over the past year.

Cross Timber Royalty Trust (CRT) is currently trading at $46.50. It has a 1-year price return of 24.05% compared to 1% for the S&P 500. CRT has a current dividend yield of 6.43% paid as a monthly dividend. CRT has a total return (1-year price return and dividend yield) of 30.48%. This is 8 times more profitable than the S&P 500. This is clear evidence that monthly dividend stocks can provide significant income investment returns beating the S&P 500.

CRT Company Profile: Cross Timbers Royalty Trust (Trust) is an express trust. The Trust is a widely held fixed investment trust (WHFIT). The Company entered into Cross Timbers Royalty Trust Indenture between predecessors of XTO Energy Inc. (XTO Energy), as grantors, and NCNB Texas National Bank, as trustee. As of December 31, 2010, Bank of America, N.A. is the trustee of the trust. Approximately 20 of the underlying royalty interests in the San Juan Basin burden working interests in properties operated by XTO Energy. XTO Energy also operates the Penwell Unit, which is the properties underlying the Texas 75% net profits interests and ExxonMobil operates the Hewitt Unit, which is the properties underlying the Oklahoma 75% net profits interests. Other than these properties, XTO Energy and ExxonMobil do not operate or control any of the underlying properties or related working interests.

Main Street Capital (MAIN) is currently trading at $17.50. MAIN has a 1-year price return of 13.77% compared to 1% for the S&P 500. MAIN has a current dividend yield of 8.64% paid as a monthly dividend. MAIN has a total return (1-year price return and dividend yield) of 22.41%. This is 7.5 times more profitable than the S&P 500. Again, this is another monthly dividend stock significantly beating the S&P 500.

MAIN Company Profile: Main Street Capital Corporation (MSCC) is a principal investment firm focused on providing customized financing solutions to lower middle-market companies with annual revenues between $10 million and $100 million. The Company was formed for the purpose of acquiring 100% of the equity interests of Main Street Mezzanine Fund, LP (MSMF) and its general partner, Main Street Mezzanine Management, LLC (MSMF GP); acquiring 100% of the equity interests of Main Street Capital Partners, LLC (the Investment Manager); raising capital in an initial public offering (IPO), which was completed in October 2007, and thereafter operating as an internally managed business development company (BDC). MSMF is licensed as a Small Business Investment Company (SBIC) by the United States Small Business Administration (SBA) and the Investment Manager acts as MSMF’s manager and investment adviser. The Company invests primarily in secured debt instruments, equity investments, warrants and other securities.

Reaves Utility Income Fund (UTG) is currently trading at $25.08. UTG has a 1-year price return of 14.09% compared to 1% for the S&P 500. UTG has a current dividend yield of 6.0% paid as a monthly dividend. UTG has a total return (1-year price return and dividend yield) of 20.09%. This is 6.7 times more profitable than the S&P 500. Again, this is another monthly dividend stock significantly beating the S&P 500.

UTG Company Profile: Reaves Utility Income Fund (the Fund) is a non-diversified closed-end investment Company. The Find’s investment objective is to provide a high level of after-tax income and total return consisting primarily of tax-advantaged dividend income and capital appreciation. The Fund may invest a portion of its assets in foreign securities. In the event that the Fund executes a foreign security transaction, the Fund will enter into a forward foreign currency contract to settle the foreign security transaction. It focuses to invest at least 80% of its total assets in dividend-paying common and preferred stocks and debt instruments of companies within the utility industry. The remaining 20% of its assets may be invested in other securities, including stocks, money market instruments and debt instruments, as well as certain derivative instruments in the utility industry or other industries.

List of High Quality, High Yield Dividend Stocks

We have a new list of high yield dividend stocks that are also filtered by being high quailty stocks.  The filters are shown in the table below.  These stock criteria include a buy or hold rating from Zacks Research, a projected EPS of 10% or greater, cashflow growth rate of 0.06% or greater, etc.

 Zachs
Research
Is Rated Buy or Hold
Dividend Yield Greater than or Equal to 5.00%
EPS Growth (Proj this Yr vs. Last Yr) Greater than or Equal to 10.00%
P/E (This Year’s Estimate) Less than or Equal to 20.0
Cash Flow Growth Rate (TTM vs. Prior TTM) Greater than or Equal to 0.06%
Interest Coverage (Most Recent Qtr) Greater than or Equal to 3.0x
Security Price Greater than or Equal to $5.00
Volume (90 day Average) Greater than or Equal to 50.0K

 

The list of stocks passing this hurdle are shown in the graph below.  The most impressive stock is Two Harbors (TWO) which sports an 18% yield due to a recent price decline.  TWO has NO long-term debt which is great for a REIT and is rated a strong buy by many analyst,  Here is a detailed company description:

Two Harbors Investment Corp. (TWO) is an real estate investment trust (REIT), which focuses on investing in, financing and managing residential
mortgage-backed securities (RMBS). The Company focuses on investing in the asset classes, which includes agency RMBS, non-agency RMBS and financial assets other than RMBS, consisting of approximately 5% to 10% of the portfolio. Two Harbors is externally managed and advised by PRCM Advisers LLC. Capitol Acquisition Corp. (Capitol) is a wholly owned indirect subsidiary of Two Harbors. On October 28, 2009, Two Harbors Merger Corp., a wholly owned subsidiary of the Company merged with Capitol.

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