5 Dividend Stocks That Pay $1846 per month – There is nothing that grabs the attention more than passive income. A constant stream of income with minimum effort is a dream come true. we are dependent on money one way or another, but constantly trading your time for money isn’t a recipe for a joyful life, and passive income solves that problem. The first thing that comes into mind when we talk about passive income is real estate because you probably paid rent at some point in your life.
You paid someone’s passive income! Wouldnt it be great if someone else paid you every month? It’s easy to understand how real estate can be turned into passive income. However, stocks can be as passive as real estate. There are multiple ways to profit from the stock market and one of them is by investing in dividend stocks companies that share their profits with their shareholder at the end of the quarter.
These are the companies that have already established themselves in their respective industries are developed effective business models that allow them not only to make enough profits to invest back in themselves but distribute part of it to their owners. But before investing in any dividend stocks, it’s important to pay attention to a few things.
First of all, how long the company has been paying dividends? Sometimes some companies are struggling financially and start paying some dividends to attract investors to raise their stock prices. So, the longer the company has been paying dividends, the better.
Another factor worth paying attention to is how often the company has been raising its dividend payment. Every single year we have inflation of at least 1.5 percent, sometimes it can go as high as 8 or 9 percent like it has been happening recently, so the company must raise its dividend payments every year.
There is a group of companies that are called the king of dividends, they have been raising their dividends for at least 50 years! But not all companies have been around for over 50 years, that’s why it is worth looking at stocks that are not on the king of dividend list. The best dividend stocks are the ones that sell necessities, products that people constantly come back for.
Take antibiotics. Since their invention in 1928, they have become a vital part of our lives and it’s almost impossible to imagine that people would stop buying them in the coming future, so companies that specialize in antibiotics and have established themselves in this industry can expect a constant stream of income, at in the foreseeable future.
Coca-Cola is another example. Soft drinks have become an essential part of our beverage consumption. Once you get hooked, it’s not easy to stop drinking cola, it just turns into a daily habit. so if you are looking to create a real source of passive income through dividend stocks, you have to look at the companies behind these stocks to understand their business plans. So let’s take a look at some of the dividend stocks that can help you to create a monthly source of income of thousand, 2K, or even 3K dollars per month.
5 Dividend Stocks That Pay $1846 per month
Before looking at its dividend yield, let’s take a look at its products. First of all, this company is so old that it’s older than some nations, it was founded in 1886. It’s an American icon. Take a look at their most popular product such as Tylenol, the pain killer. I can’t live without painkillers. I can’t wait for my headache to cure on its own and I guess I am not alone. You can already see how this product alone is a percent source of constant income for the company.
Take band-aids or johnson’s baby powder, it’s one of the most popular baby powders on the market. It’s a necessity for every parent. They have an entire line of healthcare products, medical devices, and much more. If you look at its stock, it has a dividend yield of 2.38 percent at the time of this script. That’s pretty good for the stock market, considering that a lot of companies such as Facebook don’t pay anything at all, although they are almost monopolies in their fields.
The best part about it is that it has been raising its dividend payments for over 5 decades. If 2.38 is not impressive, take a look at its stock price, over the last 5 years, it has increased by 42 percent. Of course, that’s nothing for the stock market, but that’s the nature of stable dividend stocks. Their stock price doesn’t raise much but at the same time, they pay stable dividends which makes them a perfect stock for passive income.
2. Energy companies
Energy companies are some of the best companies when it comes to dividends but some of the worst when it comes to stock prices, especially when we are talking about traditional means of energy such as oil and gas. I mean the business model is simple, extract the oil, refine it and sell it. Of course, some money must be poured into R&D to keep improving the extracting tech but that’s the biggest R&D cost unless the company is heavily investing in renewable energy.
The last 100 years have been the golden era for oil and gas companies. Of course, that golden age is coming to an end, but we still got a few decades left at best, especially with all of these conflicts around the world, oil prices are rising faster than ever, trading at above 100 dollars per barrel.
Exxon mobile is a great example. It is one of the leaders in the industry with a market cap of 350 billion dollars and a dividend yield of 4.2 percent. You have chevron which pays around 3.5 percent.
BP has a dividend yield of 4.2 percent of even Philips 66 which pays an annual dividend of 4.25 percent. But be careful with oil and gas companies because their stock prices heavily fluctuate as oil prices jump up and down.
3. Procter and Gamble
Everyone knows this company. It’s a direct competitor of j&j since it also specializes in a wide range of personal health/consumer health, and personal care and hygiene products. It has been in the market since like forever, selling absolute necessities which makes its business model perfect for constant cash flow.
Over the last 5 years, the stock price has almost doubled, again not impressive, but the dividend yield of 2.26 percent is what makes it attractive. The companies that pay such dividends never experience such a significant rise in their stock price, because their stock price rises only when investors expect the company to expand significantly or come up with a revolutionary tech in the future such as Tesla. Tesla’s stock price doesn’t represent the company today but what investors believe it’s going to be worth in the future. But such a business can’t afford to pay high dividends because the goal is to make a lot of money in the future and not now.
4. Edison International
It’s a utility company that provides energy. Its stock price is relatively stable or at least it has been around 60 to 70 in the last 5 years. Nothing revolutnaity! nothing complicated, just a boring company that provides necessities. The only reason I am including it in the list is that it’s a utility company that supplies the most populated state in the US (California) and it has a dividend yield of almost 4 percent.
REITs are the gateway to real estate because they allow you to get to the market with minimum capital. When you are investing in rates, your investment is directly tied to the housing market since that’s what REITs do, they take investors’ money and invest in real estate, that’s why they often have the highest dividend yield in the market.
Annaly Capital Management for example has a 12.5 percent dividend yield at the time of this script. New residential Inv has a 9.2 percent yield. They suffered enormously in the last 2 years since people struggled to pay rent, but are slowly recovering, but at the same time, you have to understand that rates will slowly keep climbing in the coming future which will make mortgages more expensive can lower house prices.
To make any decent income like 2K per month from dividends, you need to invest something like 500 to 600K dollars assuming you will make an average of 4 percent if you diversify. That’s not that great, but your assets are going to be liquid which means, you will be able to get out of the game if you need that cash urgently.
RELATED: 5 Ways To Save Your First $100K