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.

Outlines

00:00

📈 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.

05:02

💼 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.

Keywords

💡Dividend Stocks

Dividend stocks are shares of companies that pay out a portion of their earnings to shareholders in the form of dividends. In the context of the video, these stocks are part of the speaker's top five monthly paying dividend investments, emphasizing the importance of consistent income generation for investors.

💡ETFs (Exchange-Traded Funds)

ETFs are investment funds that are traded on stock exchanges, similar to individual stocks. They hold a basket of securities and aim to track the performance of a specific index or sector. The video discusses ETFs as part of the speaker's favorite dividend investments, highlighting their role in providing diversified exposure to dividend-paying assets.

💡Income Holdings

Income holdings are investments that are expected to generate a steady stream of income for investors. In the video, the speaker mentions that the investments on the list are a combination of income holdings and growth investments, indicating that they prioritize income generation but also consider potential for capital appreciation.

💡Dividend Growth

Dividend growth refers to the increase in the dividend payments made by a company over time. The video script discusses investments that offer lower yields but have the potential for long-term dividend growth, suggesting a strategy for investors looking for both current income and potential future increases in that income.

💡Main Street Capital

Main Street Capital is a business development company (BDC) mentioned in the script as one of the speaker's favorite dividend stocks. It provides capital solutions to lower middle market companies and has a history of dividend growth without cuts, making it an attractive option for investors seeking both income and growth.

💡Special Dividends

Special dividends are one-time, often substantial, dividend payments made by a company outside of its regular dividend schedule. The script notes that Main Street Capital pays special dividends at times, represented by green on the chart, which contributes to the attractiveness of the stock for investors seeking high dividend yields.

💡NAV (Net Asset Value)

NAV is the total value of a company's assets minus its liabilities, and it is a key metric for evaluating the performance of investment funds, including BDCs. The video mentions that Main Street Capital has posted record NAV growth, indicating strong financial performance and potentially high returns for investors.

💡Covered Call ETF

A covered call ETF is an investment fund that uses a covered call strategy, where the fund holds a portfolio of stocks and sells call options on those stocks to generate additional income. The video discusses the NEOS S&P 500 High Income ETF as an example of such a fund, which seeks to provide high monthly income with potential for market appreciation.

💡Preferred Stocks

Preferred stocks are a type of corporate security that has characteristics of both common stock and bonds. They typically offer higher dividend payments than common stocks and are often considered safer investments. The video mentions the InfraCap Preferred Stock ETF as an investment that seeks current income and capital appreciation through a portfolio of preferred securities.

💡Leverage

Leverage in the context of investing refers to the use of borrowed money to increase the potential return of an investment. The script mentions that the InfraCap Fund uses a modest amount of leverage to enhance portfolio beta and current income, which can increase risk but also the potential for higher returns.

💡NASDAQ 100

The NASDAQ 100 is an index of the 100 largest non-financial companies listed on the NASDAQ stock exchange. It is heavily weighted towards technology companies. The video discusses the JP Morgan NASDAQ Equity Premium Income ETF, which seeks to provide monthly income and exposure to the NASDAQ 100 with less volatility, capitalizing on the growth of the tech sector.

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