How to Make $500 in Dividends Every Month
If you’ve got cash saved up and are looking for a better solution than to simply put it into the bank, then this post is for you. I’ll show you how you can earn up to $500 a month in dividends if you’ve got $100,000 or more to invest with. With a typical savings account you’ll be lucky to get higher than 1% per year, but with dividend stocks you can earn far more than that.
A lot will depend on your risk tolerance, since safer stocks often offer higher yields. My focus is going to be on stocks that have what I’d consider to be a moderate amount of risk.
The four stocks below can help diversify your portfolio, add monthly dividends, and potentially produce some great long-term returns as well.
First National Financial Corp (TSX:FN) is a lending company that issues mortgages to both commercial and residential customers. While the stock has seen its ups and downs over the years, over 10 years it has more than doubled in price, and during the last five it has increased by more than 50%. It’s also not an expensive buy as it trades at less than 10 times its earnings.
It currently pays a monthly dividend that yields more than 6.3% annually. The company is committed to giving back to its investors, and last year it even issued a special dividend of $1.25. Although that isn’t a guarantee to happen again, it shows the company’s desire to reward its shareholders and provide them with great returns.
An investment of $25,000 here would earn you over $132 every month.
Sienna Senior Living Inc (TSX:SIA) is a stock that I believe has a lot of opportunity to grow, particularly as the population continues to age and demand for long-term care rises. The company has many retirement residences that it can generate income from as well, and so there are plenty of ways for it to cash in on an aging population.
Although the stock is down 5% so far in 2018, over the past five years its share price has risen by more than 60%. And while sales have increased by more than 58% since 2013, there is clearly even more growth potential ahead for Sienna. The stock currently pays a dividend that yields about 5.2%, and it recently hiked its payouts as well. If you were to invest another $25,000 here, that would generate about $110 in monthly dividends for your portfolio.
Gamehost Inc (TSX:GH) offers a bit of diversity in its operations as its segments encompass hotel, casino, and food and beverage. The one caveat of this is that the company is based in Alberta, and so it’s going to be impacted by the ups and downs of the oil and gas industry. If you’re bullish on the economy in Alberta, then this could be a great stock to buy as Gamehost has declined 14% in the past five years, struggling right along with oil and gas stocks. However, over the past three years just as the oil patch has recovered, so too has Gamehost, with the stock up more than 12% during that time.
Although the company did have to trim its dividend in 2016, it is still paying investors more than 6% annually. A $25,000 investment here would add $125 to your portfolio every month.
Pizza Pizza Royalty Corp (TSX:PZA) rounds out a fourth industry that you can add to your portfolio, and investing in pizza seems obvious since it doesn’t seem in danger of going out of style anytime soon. The company collects royalties and so it is able to generate terrific margins for investors. However, the stock recently took a bit of a dip as investors sold off the stock as a drop in the amount of royalties collected during its second quarter scared away many buyers.
But I see this as a bit of an overreaction, as the stock has seen a lot of consistency in its top line, with sales ranging between $35 million to $36 million in each of the past three years. It has seen a slow and steady growth thus far, but the recent dip in price has weighed down the stock heavily as it now is down 24% over the past five years.
However, that’s not all bad, since the stock is still a good buy and the drop in price has pushed the dividend yield up to a staggering 9% per year. And before you get concerned about that percentage, keep in mind that the company has plenty of free cash flow and normally distributes it out in the form of dividends. Getting in at a 9% yield now and investing another $25,000 would allow you to collect $188 on a monthly basis.
Below is a summary of all the stocks above and their expected dividends, assuming a $25,000 investment in each:
|Dollars Invested||$ 25,000.00||$ 25,000.00||$ 25,000.00||$ 25,000.00||$ 100,000.00|
|Monthly Dividend||$ 132.93||$ 109.66||$ 125.55||$ 188.03||$ 556.17|
Note: It is important to remember that dividend payments are always subject to change, and companies can always cut or eliminate payouts entirely. There is no guarantee that a payment today will be there next year. Investors should always do their own analysis and be comfortable with the stock that they own. Investing solely for a dividend is not a strategy I would suggest, and before you consider buying any of the aforementioned stocks you should always do your own analysis or consult with an adviser.