Best Monthly Dividend Stocks and ETFs: Why JEPI Is a Top Pick

 

Best Monthly Dividend Stocks and ETFs: Why JEPI Is a Top Pick

Introduction

Investors seeking regular income often turn to monthly dividend stocks and exchange-traded funds (ETFs).

These financial instruments provide consistent cash flow, making them attractive to those looking to supplement their income or reinvest dividends for compounded growth.

Top Monthly Dividend Stocks

Several companies have established a reputation for paying monthly dividends.

Here are some notable examples:

  • AGNC Investment Corp. (AGNC): A real estate investment trust (REIT) specializing in residential mortgage-backed securities, offering a forward dividend yield of approximately 13.99%.
  • Ellington Financial (EFC): Focuses on acquiring and managing mortgage-related assets, with a forward dividend yield around 11.26%.
  • Apple Hospitality REIT (APLE): Invests in upscale, select-service hotels, providing a forward dividend yield of about 6.59%.
  • Realty Income Corporation (O): Known as "The Monthly Dividend Company," this REIT invests in free-standing, single-tenant commercial properties and offers a forward dividend yield of 5.59%.

It's essential to note that while high yields are attractive, they can also indicate higher risk.

Investors should assess the sustainability of these dividends and the financial health of the issuing companies.

Leading Monthly Dividend ETFs

For diversified exposure, many investors prefer ETFs that pay monthly dividends.

Some of the top options include:

  • Global X SuperDividend ETF (SDIV): This ETF invests in 100 of the highest dividend-yielding equities globally, offering a high dividend yield. However, investors should be cautious, as high yields can sometimes indicate underlying risks.
  • Invesco S&P 500 High Dividend Low Volatility ETF (SPHD): Focuses on 50 securities from the S&P 500 Index that have historically provided high dividend yields and low volatility, offering a balanced approach to income and risk management.

When considering these ETFs, it's crucial to evaluate their expense ratios, underlying holdings, and yield sustainability.

JEPI: A Top Pick for Monthly Income

The JPMorgan Equity Premium Income ETF (JEPI) has garnered attention for its unique approach to generating monthly income.

Here's why JEPI stands out:

  • Investment Strategy: JEPI combines a portfolio of U.S. large-cap stocks with options strategies to generate income. By selling options on its holdings, JEPI aims to provide investors with attractive yields while maintaining exposure to equity markets.
  • Attractive Yield: Since its inception in 2020, JEPI's annual yield has fluctuated between 8% and 12%, partly due to episodes of heightened market volatility and high option premiums.
  • Risk Management: The fund's strategy aims to reduce downside exposure by forgoing some upside participation, seeking to deliver a significant portion of the returns associated with the S&P 500 Index with less volatility.

Investors considering JEPI should understand the fund's strategy and assess how it aligns with their investment objectives and risk tolerance.

Conclusion

Monthly dividend stocks and ETFs can be valuable components of an income-focused investment portfolio.

While individual stocks like AGNC Investment Corp. and Realty Income Corporation offer attractive yields, ETFs such as JEPI provide diversified exposure with the potential for consistent monthly income.

As always, investors should conduct thorough research and consider consulting with a financial advisor to ensure these investments align with their financial goals and risk tolerance.

For more information on JEPI and its investment strategy, visit JPMorgan's official page:

JPMorgan Equity Premium Income ETF (JEPI)

To explore other monthly dividend ETFs, consider this resource:

Top Monthly Dividend ETFs

For a comprehensive list of high dividend yield ETFs, refer to this guide:

Highest Dividend Yield ETFs

Keywords: monthly dividend stocks, monthly dividend ETFs, JEPI, JPMorgan Equity Premium Income ETF, dividend investing