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Like Dividends? This Portfolio Provides Monthly Income

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While most stocks pay quarterly dividends, investors can still construct a portfolio that allows them to get paid monthly.

How? Let me explain –

The first stock pays its dividend in January, April, July, and October. The second stock pays out in February, May, August, and November. And finally, the third stock will pay its dividend in March, June, September, and December.

So, investors can reap steady monthly paydays with just a little positioning.

A combination of Coca-Cola (KO - Free Report) , Caterpillar (CAT - Free Report) , and McDonald’s (MCD - Free Report) shares would provide precisely the blend needed for this portfolio. Let’s take a closer look at each one.

Coca-Cola

Coca-Cola is an American multinational corporation best known for its flagship Coca-Cola beverage. KO’s substantial brand equity, marketing, research, and innovation have helped it become the titan it is today.

The company has seen its earnings outlook drift higher as of late, indicating bullish sentiment from analysts and landing the stock into a Zacks Rank #2 (Buy).

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Image Source: Zacks Investment Research

Reflecting an unparalleled commitment to shareholders, KO holds the rank of a Dividend King, paying out investors increased dividend payouts for at least 50 consecutive years.

Currently, Coca-Cola’s annual dividend yields 2.9% annually, nicely above the Zacks Consumer Staples sector average. The company’s shareholder-friendly nature is illustrated below.

Zacks Investment Research
Image Source: Zacks Investment Research

Caterpillar

Caterpillar is the world’s largest construction-equipment manufacturer. We see its iconic yellow machines at nearly every construction site. Similar to KO, Caterpillar has seen its near-term earnings outlook inch higher as of late, indicating an optimistic outlook from analysts.

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Image Source: Zacks Investment Research

In addition, the company’s shares aren’t expensive, with the current 14.3X forward earnings multiple sitting below the 15.8X five-year median and highs of 21.4X in 2022.

Zacks Investment Research
Image Source: Zacks Investment Research

Keep an eye out for Caterpillar’s upcoming quarterly release on April 27th; the Zacks Consensus EPS Estimate of $3.79 suggests an improvement of more than 30% year-over-year. Our consensus revenue estimate stands at $15.2 billion, 12% higher than the year-ago figure.

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Image Source: Zacks Investment Research

McDonald’s

We’re all familiar with the restaurant titan McDonald’s, seeing those golden arches at seemingly every stop.

The company rewards its shareholders handsomely, with its annual dividend currently yielding 2.1%. Impressively, the company has grown its payout by more than 7% over the last five years.

Zacks Investment Research
Image Source: Zacks Investment Research

Perhaps to the surprise of some, MCD shares have been quietly strong over the last five years, penciling in a sizable 106% gain and widely outperforming the S&P 500.

Zacks Investment Research
Image Source: Zacks Investment Research

Bottom Line

Investors love dividends, as they provide a nice buffer against the impact of drawdowns in other positions and provide a passive income stream.

And while most companies pay their dividends on a quarterly basis, investors can construct a portfolio that allows for monthly payouts with just a bit of positioning.

For those interested in this type of portfolio, the combination of all three stocks above – Coca-Cola (KO - Free Report) , Caterpillar (CAT - Free Report) , and McDonald’s (MCD - Free Report) – would provide the necessary blend needed.


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Caterpillar Inc. (CAT) - free report >>

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