Dividends Pay Retirement Bills

In December I compiled a list of Monthly Dividend Stocks to Snag in 2014, which has proven to be one of my most popular articles of the past year.  It’s not hard to see the appeal of a monthly dividend, particularly if you are retired and living off your investments.  Your expenses—including everything from house and car payments to your utilities and mobile phone bill—are almost always on a monthly cycle, whereas most income-producing investments pay quarterly or semiannually.  A monthly dividend makes basic budgeting and planning a whole lot easier.

But let’s say that you’re still years from retirement.  A monthly dividend is still preferable because, if you reinvest your dividends in new shares, your share count will grow faster, speeding up the process of compounding.  This matters very little over the course of a single month.  But over an investing lifetime, it can have an outsized effect on your returns.

With the single exception of American Realty Capital, which has been in the doghouse with investors due to some questionable acquisitions of late, all of these monthly dividend stocks are positive for the year and beating the total return of the S&P 500.  I continue to recommend all six of these original picks as part of a diversified dividend portfolio.

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