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We all face retirement needs. As investors, we need to ensure our monthly income supports our lifestyle. My recommendation is to consider the 7 monthly dividend stocks below to supplement your income during your retirement years. The rate of annual returns in the respective tables below, assume the monthly dividends are not reinvested in additional shares. This assumption is realistic for many retirees as money is needed to fund living expenses during their retirement years.

Atlantic Power Corporation (NYSE:AT)

Atlantic Power owns and operates a diverse fleet of power generation and infrastructure assets in the U.S. The power generation assets sell electricity to utilities under long-term contracts. The goal is to minimize the risk to commodity prices. Atlantic Power has 12 power generation sites across 9 states, but the company is purchasing new assets to increase corporate long-term growth potential.

Yield

Atlantic Power pays a nine cent per month dividend. This equates to an annual 8.3% dividend yield.

Positives

On November 5, Atlantic Power acquired Capital Power Income L.P. This acquisition is positive for Atlantic Power for the future. On November 15, Atlantic Power issued their 3rd quarter results. The annual dividend will increase slightly, but a solid 8.3% yield exists.

Atlantic Power is a utility company. This is an advantageous sector during a difficult economic environment.

Negatives

I believe Atlantic Power was less than opportunistic in obtaining adequate debt and secondary share offerings to fund the Capital Power Income L.P. acquisition. The company had ample opportunities to issue a secondary at the $15 - $16 per share range. Management waited and issued a secondary at sub $14 per share.

Atlantic Power, on October 26, issued $460 in U.S. debt. The coupon rate was at 9%. The debt offering matures on November 15, 2018. This is an extremely high yield based upon current interest rates.

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Baytex Energy Corp. (NYSE:BTE)

Baytex Energy (BTE) is a conventional oil and gas company. The business model is a growth and income strategy. Baytex acquires, develops, and produces oil and natural gas. The key location is in the Western Canadian Sedimentary Basin. Baytex is moving into the United States with new assets. Baytex changed from a trust to a corporation in 2011. This was due to the trust taxation laws in Canada.

Investors, from a November 16 presentation (pdf), can view Baytex's growth prospects and high oil production. Oil is 91% of Baytex's hydrocarbon production.

Yield

The annual dividend currently is an annual 4.6% yield. The strong growth prospects, however, make this one to watch for higher rates of dividend growth. The company pays a 19.7 cents per month dividend.

Positives

Baytex has strong institutional ownership. The company has provided an impressive total annualized rate of return of 29.2% over the past 5 years. This assumes dividends are not reinvested, which is only more impressive when looking in a rear view mirror.

The company continues to expand. Baytex has moved into the North Dakota, for additional growth prospects. The growth and income potential provide strong catalysts for the dividend investor.

Negatives

Retirement investors need high yield income. If these investors need high yield at the present time, a 4.6% yield may be too low to pay their living expenses. In the event you can establish a starter position, the dividend yield should be a good starting point until future dividend growth follows.

Enerplus Corporation (NYSE:ERF)

Enerplus is the oldest trust, and now corporation, in the Canadian energy and production sector. Although growth in income lacks Baytex, Enerplus offers investors a solid income stream year in and year out.

Yield

The annual dividend yield is currently 8% per annum. The monthly dividend payments are 17.7 cents per share. The annual dividend is $2.13.

Positives

Enerplus management is savvy and aggressively moving into new production growth areas. One area, Marcellus (pdf), within the U.S. has been a key focal point to ensure the company has increased production for future quarters and calendar years.

Negatives

The company produces an 8% annual dividend yield. The dividend is based upon a Canadian currency exchange rate. Due to the euro sovereign debt crisis, investors have experienced a weak Canadian loon versus the U.S. dollar. This has negatively impacted the Canadian foreign exchange rate when calculating monthly dividends.

The Gabelli Global Gold, Natural Resources & Income Trust (NYSEMKT:GGN)

Gabelli Global Gold owns equity positions in gold, oil, and natural resource stocks. The fund sells covered calls against its equity positions.

Yield

Gabelli Global Gold, Natural Resources & Income Trust pays a 14 cent per month dividend. This equates to a $1.68 annual dividend yield. The annual 10.3% dividend yield has been a personal god send, for me, on an ongoing basis.

Positives

A 10.3% dividend yield, managed by competent Gabelli staff, is a highly desirable and reliable income. As U.S. Treasury Bill and U.S. Treasury Bond yields are sub 4%, a 10.3% yield is highly attractive to retirees.

Negatives

Some investors are not aware that covered calls are reported as return of capital. This requirement is due to SEC requirements. Gabelli Global Gold, Natural Resources & Income Trust has paid a monthly 14 cent dividend since June 2005. Investors have been rewarded a 14 cent monthly dividend for 6.5 years.

Main Street Capital Corporation (NYSE:MAIN)

Main Street Capital pays a 13.5 cent monthly dividend. This equates to a $1.62 per year annual dividend. The yield is an enticing 8.7% per year. I strongly recommend Main Street Capital as a business development corporation (BDC) to invest in.

Yield

The current yield an annualized 8.7% yield. This is based upon a 13.5 cent monthly dividend.

Positives

Main Street Capital has done an incredible job for shareholders. The company has provided a 12.8% total annualized rate of return versus the SP500. This was during an extremely difficult economic climate.

Negatives

I cannot say anything negative of the Main Street Capital performance. Investors are aware of the strengths, the success, and very healthy 8.7% dividend yield. I recommend this stock to all business development corporation investors.

Realty Income Corp. (NYSE:O)

Realty Income's nickname is the "monthly dividend payer." The company operates 2,600 commercial properties in 49 states. The company has established long-term leases with large tenants. These tenants are blue-chip companies with the highest investment grade pedigree. Because of the selection process, Reality Income has a high occupancy rate. The company chooses what assets and what clients to do business with on an ongoing basis. Reality Income has a history of 42 consecutive years of monthly dividends paid.

Yield

The dividend yield is a solid 5.2% annually. The monthly 14.5 cent dividend is reliable and proven over 42 years.

Positives

The company has proven itself for 42 years. The clientele are blue chip. I highly recommend this equity.

Student Transportation, Inc. (NASDAQ:STB)

Student Transportation provides school bus transportation services in the U.S. and Canada. The core Student Transportation services are contracted services to public and private school districts; special need transportation services; and charter transportation services. Charter services include field trips and sporting team transportation.

Yield

The yield is a solid 9% yield based upon a 4.6 cent per month dividend. Management is buying back shares and growing the company.

Positives

The company was able, per its November 10 quarterly filing, to sign a line of credit with a fixed 4.24% yield. Contrasting this yield to Atlantic Power's recent 9.2% effective yield is startling. Companies have purchased insider shares, including shares by CEO Gallagher, Denis Joseph.

The company continues to grow through acquisitions. On November 15, Student Transportation agreed to acquire "....Wisconsin-based Dairyland Bus, Inc. and related companies. The acquisition will add over 700 vehicles, annualized revenues of over US$36 million and five locations to the Company's existing Midwest operations...". Per the article, Denis Gallagher states revenue was expected to grow by 12% for the fiscal year. The Dairyland Bus will add an additional 6% revenue increase for the fiscal year.

Negatives

U.S. investors should recognize the tax consequences of owning Student Transportation. For a complete detail, this company link adds additional info for tax reporting. As April 15 approaches, investors need to know the U.S. tax reporting of owning Student Transportation shares.

Action Plan

I own all 7 names. My focus is to talk my book. My views are based upon my research. I use the income to pay for monthly bills. Money left over is reinvested in the above equities. Times change and companies can change for the better or worse. I monitor the above names and will change holdings if the company's business models change and dividends are not paid.

My personal number one selection is Baytex. The company is simply outperforming its peers and has solid investment returns ahead for future years.

I believe in choosing your spots to buy these stocks. Try to focus on down days to acquire shares. These are monthly income stocks. There is zero need to chase them. Wait for the price to come to you. I have a strong suspicion these companies will be around for awhile. If not, we will roll with the punches and adjust the names accordingly.

Diversify and make the monthly dividends serve your retirement needs.

Source: Plump Monthly Dividend Stocks For 2012 Retirement