These Are My Favorite High Yield Monthly Dividend Stocks
Summary
TLDRThis video offers insights into the top five favorite monthly dividend-paying stocks and ETFs for income-focused investors. The list includes Main Street Capital for its growth potential, NEOS S&P 500 High Income ETF for high yields and tax efficiency, InfraCap Preferred Stock ETF for its focus on preferred securities, and JP Morgan NASDAQ Equity Premium Income ETF for tech exposure with less volatility. The video emphasizes the importance of balancing growth and income, and encourages viewers to research these investments for their portfolios.
Takeaways
- 📈 The video discusses the speaker's top five favorite monthly paying dividend stocks and ETFs, which combine both income and growth potential.
- 🏢 The first stock highlighted is Main Street Capital (ticker M), a business development company known for its excellent long-term growth and consistent dividend payments.
- 💹 Main Street Capital stands out for its equity investment strategy, which has led to lower yields but significant share price appreciation.
- 📊 The second investment mentioned is the NEOS S&P 500 High Income ETF (ticker SPYIED), which offers high monthly income with potential for market appreciation and is actively managed for better upside capture.
- 🌐 The SPYIED ETF is unique for its tax-efficient strategy, utilizing derivatives and seeking to take advantage of tax loss harvesting opportunities.
- 💼 The video skips over the next investment, Realy Income, due to recent coverage and audience feedback, but notes its status as a dependable dividend grower with over 6% yield.
- 🏦 The InfraCap Preferred Stock ETF (ticker PFFA) is highlighted for its focus on income, active management, and use of leverage to enhance portfolio beta and current income.
- 📉 Preferred stocks, like those in the PFFA ETF, offer high dividends and are safer than common stocks, with dividends paid out before common stock dividends.
- 🚀 The last investment discussed is the JP Morgan NASDAQ Equity Premium Income ETF (ticker JQQQ), which aims to provide monthly income and NASDAQ 100 exposure with less volatility.
- 🤖 JQQQ has benefited from the tech and AI boom, with top holdings including major tech names like Microsoft, Apple, Nvidia, and Amazon.
- ⚠️ A concern for JQQQ is its performance during a market downturn, as its success has been tied to the tech boom and potential bubble.
Q & A
What is the main focus of the video?
-The video focuses on discussing and providing updates on the speaker's top five favorite monthly paying dividend stocks and ETFs.
What are the characteristics of the investments listed in the video?
-The investments listed are a mix of high-yielding holdings with little growth and dividend growth investments with lower yields but the potential for long-term dividend increases.
What is Main Street Capital and what makes it stand out among business development companies (BDCs)?
-Main Street Capital is a business development company that provides capital solutions to lower middle market companies. It stands out for its excellent long-term growth, never having a dividend cut in its history, and growing its dividend almost every year since its IPO in 2018.
Why is the yield of Main Street Capital lower compared to other BDCs?
-Main Street Capital holds a lot more equity investments compared to other BDCs, which typically hold mostly first-lien debt and a tiny amount of equity. This equity focus results in a lower yield but has contributed to its share price growth.
What is the ticker symbol for the NEOS S&P 500 High Income ETF and what is unique about it?
-The ticker symbol for the NEOS S&P 500 High Income ETF is SPYIED. It is unique because it is an actively managed fund that seeks high monthly income in a tax-efficient manner with the potential for upside appreciation in rising markets.
How does the SPYIED ETF generate its high income?
-SPYIED generates high income from the premiums earned from SPY call options as well as derivatives received from the fund's equity holdings.
What is the main advantage of the actively managed SPYIED ETF over other S&P 500 covered call funds?
-The main advantage is that SPYIED utilizes a call option strategy that can include both sold and purchased SPX index options, providing the opportunity for better upside capture in rising equity markets and offering a much higher yield than alternatives like XYLD.
What is the InfraCap Preferred Stock ETF and what are its key features?
-The InfraCap Preferred Stock ETF, ticker PFFA, seeks current income and secondarily capital appreciation through a portfolio of preferred securities issued by US companies. Its key features include a focus on income, active management, and enhanced exposure through the use of a modest amount of leverage.
Why are preferred stocks considered safer than common stocks?
-Preferred stocks are considered safer because they pay a set amount of dividends each quarter and have less share price movement. Moreover, before a company can issue dividends for its common shares, it must first pay dividends on its preferred shares.
What is the JP Morgan NASDAQ Equity Premium Income ETF and how does it aim to deliver income and exposure?
-The JP Morgan NASDAQ Equity Premium Income ETF, ticker JQQQ, aims to deliver monthly distributable income and NASDAQ 100 exposure with less volatility by implementing written out-of-the-money NASDAQ 100 index call options.
What is the main concern regarding the performance of JQQQ during a market downturn?
-The main concern is how JQQQ will fare during a sizable downturn, as it has mostly benefited from the tech boom. If there is a bubble burst in tech, the impact on its share price and dividend distributions is uncertain.
Outlines
📈 Monthly Dividend Stocks and ETFs Overview
The speaker introduces their top five favorite monthly paying dividend stocks and ETFs, emphasizing a mix of high-yielding income holdings and dividend growth investments. They note the importance of evaluating each investment based on individual growth or income targets. The first stock highlighted is Main Street Capital (ticker: M), a business development company offering capital solutions to lower middle market companies. Despite its lower yield, it stands out for its consistent growth and lack of dividend cuts since its IPO. The speaker also mentions the use of equity investments as a key to Main Street's success and advises on the best times to buy the stock.
💼 NEOS S&P 500 High Income ETF Review
The second paragraph discusses the NEOS S&P 500 High Income ETF (ticker symbol: SPYIED), an actively managed fund designed to provide high monthly income and potential for capital appreciation. The ETF uses a covered call strategy and derivatives to generate income, offering a yield of over 12%. The speaker compares it favorably to other S&P 500 covered call funds, particularly in terms of appreciation during rising markets and tax efficiency due to the use of 1256 contracts. They highlight the fund's unique aspects, including tax loss harvesting opportunities and its status as their current favorite income ETF.
Mindmap
Keywords
💡Dividend Stocks
💡ETFs (Exchange-Traded Funds)
💡Income Holdings
💡Dividend Growth
💡Main Street Capital
💡Special Dividends
💡NAV (Net Asset Value)
💡Covered Call ETF
💡Preferred Stocks
💡Leverage
💡NASDAQ 100
Highlights
The video discusses the top five favorite monthly paying dividend stocks and ETFs.
The investments listed are a mix of high-yielding holdings with little growth and those with lower yields but potential for long-term dividend increases.
The order of investments is not ranked, and viewers are advised to consider their growth or income targets when evaluating options.
Main Street Capital (ticker M) is highlighted as a business development company with a history of excellent long-term growth and no dividend cuts.
Main Street Capital's success is attributed to its focus on equity investments, which results in lower yields but significant share price growth.
The NEOS S&P 500 High Income ETF (ticker SPYIED) is an actively managed fund that seeks high monthly income with potential for market appreciation.
SPYIED offers over 12% yield and uses a call option strategy for better upside capture in rising equity markets.
The ETF also seeks tax savings opportunities through the use of SPX index options classified as 1256 contracts.
Real estate investment trust (REIT) Realty Income is mentioned as a dependable dividend grower with a current yield over 6%.
Infracap Preferred Stock ETF (ticker PFFA) is a newer ETF focusing on income with a focus on preferred securities.
PFFA uses active management and leverage to enhance portfolio beta and current income, offering a yield of nearly 10%.
Preferred stocks are likened to bonds with higher dividend amounts and are safer than common stocks.
JPMorgan NASDAQ Equity Premium Income ETF (ticker JPQ) aims to deliver monthly income with NASDAQ 100 exposure and less volatility.
JPQ has a yield of about 10% and has benefited from the tech and AI boom, with top holdings similar to the Invesco QQQ ETF.
The video concludes with a caution regarding JPQ's performance during a potential tech bubble burst and its lower expense ratio compared to typical actively managed ETFs.
The presenter invites viewers to connect on Patreon for updates and discussions on high-yielding dividend and income investments.
Transcripts
in this video I'm going to discuss and
provide updates on my current top five
favorite monthly paying dividend stocks
in ETFs the Investments on this list are
a combination of Income Holdings which
are higher yielding Holdings that don't
offer much growth and dividend growth
Investments which have lower yields but
provide longer term dividend increases
these Investments are in no particular
order and depending on whether you're
targeting more growth or income you'll
want to weigh the pros and cons of each
investment and decide which ones are
worth considering for you so with that
being said let's get right into it
the first stock is Main Street Capital
ticker M they're a business development
company that provides One-Stop Capital
Solutions which includes private debt
and Equity Capital to lower Middle
Market companies and debt Capital to
Middle Market companies main Street's
portfolio Investments are typically made
to support management buyouts
recapitalizations growth financing
refinancing and the acquisition of
companies that operate in diverse
sectors despite offering the lowest
yield on this list the performance of
Main Street Capital has been excellent
It's PR for a BDC to offer really good
growth as most companies in this sector
have had flat share prices with higher
yields but this BDC stands out for its
excellent long-term growth they've never
had a dividend cut in their history and
have since grown their dividend almost
every year since their IPO in 2018
you'll also notice they pay a good
amount of special dividends at times
represented by Green on the chart the
key to Main Street success is them doing
well at picking Equity Investments most
bdcs like blue Al Capital hold almost
all first Lane debt and then a tiny
amount of equity Main Street holds a lot
more Equity Investments which explains
the lower yield but the share price
growth has been excellent for them
there's another really successful BDC
that holds more Equity like Main Street
which is capital Southwest although they
don't pay monthly dividends up to this
point Mains continued to post record nav
growth which is the most important
metric for a BDC the only downside to
investing in this stock is that it's
very often overvalued the best time to
buy Main Street is when there's a
sizable drawback in share price right
now main Street's currently trading at
its all-time high so I haven't bought
any more additional shares for a while
with the exception of reinvesting my
dividends but when it comes to monthly
dividend stocks that offer good
long-term growth and a higher yield than
average Main Street Capital is pretty
hard to beat the next investment on this
list is the NEOS S&P 500 High income ETF
ticker symbol
spyied itself as a fun that seeks High
monthly income in a tax efficient manner
with the potential for upside
appreciation in Rising markets the fund
invests directly and through derivatives
and stocks of companies operating across
Diversified sectors and uses derivatives
such as options to create its portfolio
this ETF seeks to generate High income
from the premiums earned from Spy call
options as well as derivatives received
from the funds Equity Holdings as of the
making of this video spyied a little
over 12% despite this ETF still being a
newer investment I've been really
pleased with the results up to this
point there's a couple things that make
this covered call ETF stand out from
others it's an actively managed fund
which you would think would come with a
much higher expense ratio than the
Alternatives but that isn't the case spy
utilizes a call option strategy that can
include both sold and purchased SPX
index options which can provide the
opportunity for better upside capture
and Rising Equity markets if we compare
this ETF with xyld which is another S&P
500 covered call fund we can see spy ey
does a better job when it comes to
appreciation and Rising markets plus it
offers a much higher yield than xyld so
in my opinion going with spy ey is a
no-brainer as opposed to X yld finally
one more unique aspect of this ETF is
that because it's actively Managed IT
seeks to take advantage of tax lost
harvesting opportunities in addition to
utilizing SPX index options classified
as 1256 contracts these are subject to
lower 60 40% tax rates so there can be
tax saving opportunities with this ETF
that you wouldn't see with others which
is another big plus it has offered a
little bit of growth but it's mostly an
income holding unlike Main Street the
vast majority of the growth that you'd
experience from this holding would come
from reinvesting the dividends so with a
yield of over 12% good diversification
and potential tax savings
spyied my favorites and it's actually my
current favorite income ETF this next
investment is one that I'm going to skip
right over because I just made a video
about them and I've gotten the message
that people are probably getting tired
of hearing about them the realy income
would definitely be included on this
list as a Dependable dividend grower
that's now yielding over 6% which is
excellent moving right along the next
investment is the infra cap preferred
stock ETF ticker pffa according to its
website the fund seeks current income
and secondarily capital appreciation
through a portfolio of preferred
securities issued by us companies with
Market capitalizations of over $100 US
according to its fact sheet the ETF has
three distinct features which are a
focus on income active management and
enhanced exposure through using a modest
amount of Leverage to help enhance
portfolio beta and current income pffa
is a relatively newer preferred stock
ETF having launched in 2018 and about a
year and a half before the pandemic and
subsequent interest rate hikes
preferreds were an area that I wasn't
invested in until recently but from an
income perspective these kinds of
Holdings are pretty ideal preferred
stocks represent ownership of a company
just like Common Stocks but they're a
little different in a couple key areas
they're more like Bonds in that they pay
a set amount of dividends each quarter
and there isn't too much share price
movement but the dividend amounts are
much higher than average with preferred
stocks and preferred Shares are safer
than their common stock counterparts
before stock can issue dividends for
their common shares they first have to
pay dividends on their preferred shares
first the infac Cap Fund though is able
to pay dividends monthly as opposed to
quarterly and this ETF also uses some
leverage to boost its dividend this can
make this a riskier holding than other
preferred ETFs that exist which is
something to keep in mind if you're more
risk averse preferred stocks as a whole
are still down because they're more
interest rate sensitive Investments
again pffa isn't a holding that you
should expect to see good amounts of
growth with but preferred stocks
especially preferred ETFs can be really
good considerations for retirees or
people who just love a high monthly
dividend it currently offers a yield of
a little under 10% and it's pretty
decently Diversified across different
sectors this last investment we'll take
a look at is Jeep Q which is the JP
Morgan NASDAQ Equity premium income ETF
the goal of this ETF is to deliver
monthly distributable income and NASDAQ
100 exposure with less volatility it
implements written out-of-the money
NASDAQ 100 index call options that seek
to generate distributable monthly income
with a yield of roughly 10% and share
price growth of over 11% this year Jeep
QQ is a holding that's taken advantage
of the tech and AI boom we've been
experiencing its top Holdings are pretty
similar to those of QQQ which is the
inviso ETF you'll notice it has
Microsoft Apple Nvidia Amazon and
basically all the big Tech names it does
deviate from QQQ in some way such as
holding some Equity link notes and some
exposure to other underrepresented
sectors of QQQ apparently Jeff Q has
held index funds at times although it
looks like as of the making of this
video they currently don't and despite
being actively managed Jeep Q charges a
much lower expense ratio than what's
typical of an actively managed ETF the
only concern I have about this holding
is how it'll Faire during a sizable
downturn there's certainly been a lot of
hype surrounding this ETF because it's
done so extremely well but that's mostly
because of the tech boom if there is a
bubble we don't know how severe this ETF
share price and dividend distributions
are going to be impacted one of the
biggest features this ETF touts is being
less volatile but we've yet to see how
well it actually does when put to a
serious test if we do experience some
kind of catastrophic bubble burst in
Tech then I wouldn't rule out possibly
selling my shares of this ETF and those
are my top favorite High yielding
monthly dividend Investments as the
making of this video my picks include a
Reit a BDC a preferred ETF a broad
covered call ETF and a hybrid NASDAQ 100
covered call ETF if you're interested in
any of these Holdings I would still
suggest conducting your own research to
see if it's a right fit for your
portfolio because as I mentioned in the
beginning there's a mixture of both
growth and high income here so depending
on what you're going for in your
portfolio you might want to consider
some and avoid others but with that
being said that's going to conclude
today's video if you'd like to connect
and also see what's inside my own
personal dividend portfolio then feel
free to check me out over on our patreon
where you'll receive updates and be able
to talk to me and other higher yielding
dividend and income investors but with
that being said thank you all so much
for watching today's video and until
next time take care
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