These Are My Favorite High Yield Monthly Dividend Stocks

Summary

This 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.