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2011 has proven to be a year of education for many, myself included. Aside from protecting from loss of capital, hedging against the risk exposure associated with equities investments has been the most important lesson I have (re)learned from the volatility our markets faced in 2011.

One of my favorite hedging strategies is the tried and true method of investing in dividend-yielding stocks and ETFs. Dividend yielding stocks and ETFs, with their consistent quarterly or sometimes monthly dividend payouts, can add a monetary cushion to the roller coaster ride that can, at times, exemplify our equities markets.

There are many choices when looking for significant yields from dividend stocks. But as I generally do not hold positions for more than a month or two, stocks and ETFs with dividends are paid monthly, instead of their more common quarterly distributing cousins, have become a favorite of mine.

Below is a list of equities with 10% to 20% annual dividend yield, with dividends distributed monthly (sorted by dividend yield):

1. ARMOUR Residential REIT, Inc. (NYSE:ARR) is a residential real estate investment trust (REIT) that offers a 20.43% dividend yield, distributed monthly. Market cap stands at $654.03 million with 0.56% insider ownership and 15.94% institutional ownership. The next three ex-dividend dates, the date(s) on which an investor must own the equity to receive the dividend payout(s), are January 11th, 2012; February 13th, 2012; and March 13th, 2012. The stock is currently 2.17% above its 50-day simple moving average (NYSE:SMA) and 4.17% above its 200-day SMA.

2. Alpine Global Dynamic Dividend Fund (NYSE:AGD) is a closed-end fund that offers a 13.93% dividend yield, distributed monthly. Market cap stands at $129.56 million with 37.56% insider ownership and 8.11% institutional ownership. The next three ex-dividend dates are January 20th, 2012; February 22nd, 2012; and March 21st, 2012. The stock is currently 7.25% below its 50-day SMA and 17.49% below its 200-day SMA.

3. Prospect Capital Corporation (NASDAQ:PSEC) is an asset management company that offers a 13.09% dividend yield, distributed monthly. Market cap stands at $1.02 billion with 2.06% insider ownership and 29.67% institutional ownership. The next ex-dividend date is January 27th, 2012. The stock is currently 1.16% above its 50-day SMA and 1.50% below its 200-day SMA.

4. PIMCO High Income Fund (NYSE:PHK) is a closed-end fund that offers a 12.17% dividend yield, distributed monthly. Market cap stands at $1.46 billion with 7.88% institutional ownership. The next ex-dividend date has not yet been declared but will likely be in the second week of January 2012. The stock is currently 1.26% below its 50-day SMA and 2.91% below its 200-day SMA.

5. Fifth Street Finance Corp. (NASDAQ:FSC) is a credit services company that offers a 12.02% dividend yield, distributed monthly. Market cap stands at $522.04 million with 2.77% insider ownership and 48.63% institutional ownership. The next three ex-dividend dates are January 11th, 2012; February 13th, 2012; and March 13th, 2012. The stock is currently 0.51% below its 50-day SMA and 8.00% below its 200-day SMA.

6. Gladstone Capital Corporation (NASDAQ:GLAD) is a closed-end fund that offers an 11.01% dividend yield, distributed monthly. Market cap stands at $160.54 million with 5.37% insider ownership and 29.05% institutional ownership. The next ex-dividend date has not yet been declared, but will likely be in the third week of January 2012. The stock is currently 0.82% below its 50-day SMA and 11.06% below its 200-day SMA.

7. Western Asset High Income Fund II Inc. (NYSE:HIX) is a closed-end fund that offers a 10.27% dividend yield, distributed monthly. Market cap stands at $818.63 million with 3.92% insider ownership and 11.31% institutional ownership. The next two ex-dividend dates are January 18th, 2012; and February 15th, 2012. The stock is currently 0.58% above its 50-day SMA and 2.55% above its 200-day SMA.

Disclosure: I am long ARR.

Continue to Part II >>

Source: 59 High-Yielding Equities With Monthly Distributions, Part I: 10% To 20% Yields