In Standard & Poor's The Outlook, Beth Piskora shows how you can create a portfolio that pays dividends twice each month using a few as six stocks.
Investors looking for regular income from their investments generally want that income to be paid out regularly throughout the year.
To help investors accomplish this, we've grouped 18 stocks according to the dates on which they usually pay quarterly dividends. By purchasing just six of these issues-one in each time slot-you would receive two dividend checks per month during the course of the year.
All the stocks in the table are ranked four- or five-STARS (our top two buy ratings) for expected above-average price appreciation over the next 12 months. We've gone one step further, and identified how many shares to purchase in order to receive monthly income of about $100.
Early January, April, July, and October:
Baxter (BAX)—100 shares
Coca-Cola (KO)—175 shares
Merck (MRK)—115 shares
Mid-January, April, July, and October:
Altria (MO)—115 shares
Cisco Systems (CSCO)—295 shares
Essex Property Trust (ESS)—40 shares
Early February, May, August, and November:
A.O. Smith (AOS)—415 shares
Deere (DE)—100 shares
Kinder Morgan Energy (KMP)—40 shares
Mid-February, May, August, and November:
CVS Caremark (CVS)—215 shares
Home Properties (HME)—70 shares
Rock-Tenn (RKT)—165 shares
Early March, June, September, and December:
ExxonMobil (XOM)—80 shares
Honeywell (HON)—120 shares
KLA Tencor (KLAC)—125 shares
Mid-March, June, September, and December:
Chevron (CVX)—50 shares
ITC Holdings (ITC)—130 shares
Travelers (TRV)—100 shares
As an example, you could buy 100 shares of Baxter, 40 shares of Essex Property Trust, 40 shares of Kinder Morgan Energy Partners, 215 shares of CVS, 80 shares of ExxonMobil, and 50 shares of Chevron.
At recent prices, the six-stock portfolio would cost $43,980 (before brokerage commissions) and provide annual income of $1,197. That's a yield of 2.7%, higher than the recent 2.1% yield on the S&P 500.
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