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There is nothing better than getting paid, especially when you have money invested in a stock. While most dividend stocks make payments on a quarterly basis, a select few pay shareholders out on a monthly basis. This is ideal for retirees and others since it creates a more stable cash flow. Another big factor is how much is paid out. While the average stock in the S&P 500 Index (SPY) yields just over 2%, there are some high-yielding stocks that pay three times that or even more. When you find a solid stock that pays a high yield every monthly, it gives you the best of both worlds. Here are two stocks that offer high yields and a monthly dividend payment:

Armour Residential REIT (ARR) is a real estate investment trust or "REIT" that invests in mortgage-backed securities. These assets are typically issued by or guaranteed by U.S. Government agencies or U.S. Government sponsored entities. This includes Federal National Mortgage Association (Fannie Mae), and Federal Home Loan Mortgage Corporation, (Freddie Mac). This company uses leverage in order to increase profits and this is typical for the mortgage sector. By borrowing money at low interest rates and re-investing it in assets that produce higher yields, it is able to generate strong returns. The mortgage REIT sector has been impacted recently by the Federal Reserve's QE3 program, which has caused lower interest rates and some mortgage refinancing. This means some higher-rate mortgages are being refinanced at lower rates and that can reduce profits for these companies. However, the stock prices in this sector have been adjusted lower in recent weeks to reflect the new realities. Armour pays dividends on a monthly basis at a rate of 9 cents per share and this creates a steady income stream for investors.

Here are some key points for ARR:
Current share price: $6.88
The 52-week range is $5.70 to $7.98
Earnings estimates for 2012: $1.18 per share
Earnings estimates for 2013: $1.07 per share
Annual dividend: $1.20 per share, which yields about 16%

Prospect Capital (PSEC) is a business development company or "BDC" that invests in many different types of companies. It also uses leverage and by borrowing money at low rates and investing it in higher-yielding assets, it is able to produce above-average returns. It typically invests in a wide range of industries including healthcare, financial services, energy and manufacturing. Some of the companies in its investment portfolio include Arctic Glacier Holdings, Inc., Targus Group International, Inc., and Totes Isotoner Corporation. This stock looks undervalued as it trades below book value, which is $10.83 per share. It's also trading well below the recent 52-week high of $12.25 per share. Prospect Capital pays a monthly dividend of 10.2 cents per share and this provides a yield of over 11%. Another big plus is that insiders have been buying the recent pullback in this stock. On November 15, Brian Oswald (an officer) bought 19,500 shares in a transaction valued at $198,000 and on November 11, Grier Eliasek (an officer) bought 9,057 shares in a transaction valued at $95,641.

Here are some key points for PSEC:
Current share price: $10.50
The 52-week range is $9 to $12.25
Earnings estimates for 2012: $1.48 per share
Earnings estimates for 2013: $1.23 per share
Annual dividend: $1.22 per share which yields 11.4%

Data sourced from Yahoo Finance. No guarantees or representations are made.

Disclaimer: Hawkinvest is not a registered investment advisor and does not provide specific investment advice. The information is for informational purposes only. You should always consult a financial advisor.

Source: 2 High-Yielding Stocks That Pay Dividends Every Month