7 Monthly Dividend Payers to Help Brighten Income Portfolios

by: Todd Johnson

My initial hunt for dividends begins with the monthly dividend payers. Receiving 12-monthly dividend checks is a bit more appealing than the typical stock which pays quarterly dividends. Ideally the monthly income flow will, at a minimum, offset my monthly expenses.

Alpine Total Dynamic Dividend Fund (NYSE:AOD)
Alpine Total Dividend Fund attempts to achieve a high current income, and -- as the annual report will show -- capital gains. The fund invests in global equity companies. Per its latest SEC N-Q filing, AOD was 42.3% invested in stocks based in the United States. The remaining holdings were outside of the U.S.

AOD has changed course to focus more upon capital share appreciation versus a major focus on dividend stocks. On page 3 of AOD's 2010 annual report, dated 10.31.2010, management addresses their 2010 performance and corrective actions implemented. Click on all charts to enlarge:

AOD utilizes ownership in a) growth dividend payers, b) value dividend opportunities, c) special dividend research, and d) paired rotation strategy. Manager Jill Evans works at maximizing capturing dividends in special dividend payments too.

  • Annual Dividend Yield: 11.19%
  • Monthly Dividend Payment: 5.5-cents per share
  • Leverage: 11.80%
  • Expense Ratio: 1.54%
  • Market Cap: $1.3-billion
  • Discount to NAV: 2.64%

Baytex Energy Corp. (NYSE:BTE)

Baytex Energy Corp. is an Alberta, Calgary based oil and gas company. BTE also has properties in the Western Canadian Sedimentary Basin. BTE converted to a corporation on January 1st, 2011. The change in the Canadian trust taxation laws initiated this corporate structure change for many Canadian trusts.
BTE is committed to a growth and income business model. Baytex does implement a hedging strategy to plan capital development projects and plan for monthly dividend payouts.

BTE's business model is committed to funding exploration and development, and funding its dividend payments through its ongoing oil production. The company is focused upon an ongoing 8% organic growth rate.
  • Annual Dividend Yield: 4.8%
  • Market Cap: $5.9-billion
  • Monthly Dividend: 20.4-cents per share

Baytex's first quarter, 2011, financial statements, page 1, highlight the company's current financial success. The stock, assuming dividends were reinvested, provided a 23% increase in price during the first quarter.

The following chart highlights an impressive 27.7% total annualized rate of return over the past 5 years.

American Strategic Income Portfolio III (NYSE:CSP)
American Strategic Income Portfolio Inc. III's (CSP) semi-annual report details their holdings in SEC filing N-CRS. The report is dated February 28th. The closed-end-fund owns 8% agency mortgage backed securities (MBS) and 92% non-agency MBS. Here is a list of the specific types of debt:

  • Commercial Loans 40%
  • Multifamily Loans 21%
  • Preferred Stocks 16%
  • U.S. Government Agency Mortgage-Backed Securities 8%
  • Corporate Notes 8%
  • Commercial Mortgage-Backed Securities 5%
  • Real Estate Owned 1%
  • Short-Term Investment 1%

CSP holds outstanding debt obligations which are not actively traded in the debt markets. Management is required to provide adequate information to state a fair value for loans. The recent N-Q identifies the specific debt instruments held by CSP.

  • Annual Dividend Yield: 12.26%
  • Monthly Dividend Payment: 8-cents per share
  • Leverage: 30.63%
  • Expense Ratio: 2.5%
  • Market Cap: $265-million
  • Discount to NAV: 9.27%

Eaton Vance Tax Advantaged Global Dividend Income Fund (NYSE:ETG)
Eaton Vance Tax Advantaged Global Dividend Income Fund seeks income through high income paying dividend stocks and preferred stock. Top holdings as of April 30th include McDonald's (NYSE:MCD), Philip Morris (NYSE:PM), and Chevron (NYSE:CVX).

  • Annual Dividend Yield: 8.38%
  • Monthly Dividend: 10.25-cents per share
  • Leverage: 25.21%
  • Expense Ratio: 1.51%
  • Market Cap: $1.5-billion
  • Discount to NAV: 5.90%

The fund is from a stellar closed-end-fund shop, Eaton Vance, and is a quality holding. The returns, however, have been less than stellar. ETG's 5-year track record is -5% per year versus the SP500's return of -.8% over the same time frame.

Due to the large market cap, investors may well be served to wait for a weak market to enter an ETG position. The stock holds global blue chip stocks and preferred stocks, and is likely to trade near the returns of global indices.

Enerplus Corporation (NYSE:ERF)
Enerplus Corporation changed - from Enerplus Resouces Fund - and went from being a trust to a corporation as per their annual report, form 40-F.

Of significance, ERF just closed on the $580-million Marcellus sale. Part of the proceeds will be used to pay down debt. The company is still in internal dialogue regarding their capital spending, production, and cost outlook for energy prices. The monthly dividend is a constant and provides a 7% dividend yield.

Enerplus gave an investor presentation on June 13, 2011. The focus is a current 7% dividend yield and a 10-15% production growth expected in 2012.

  • Annual Dividend Yield: 4.8%
  • Market Cap: $5.9-billion
  • Monthly Dividend: 20.4-cents per share

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

Gabelli Global Gold, Natural Resources & Income Trust (GGN) is a closed-end-fund (CEF) which holds shares in gold and natural resource companies. GGN management is focused upon deriving a high yield from selling covered calls against its stock holdings. GGN is trading at $17.10. The net asset value (NAV) is $16.66. GGN is trading at a 2.64% premium to NAV. I am comfortable paying less than 5% premium to NAV.
  • Annual Dividend Yield: 9.82%
  • Leverage: 9.57%
  • Expense Ratio: 1.50%
  • Market Cap: $1.03-billion
  • Premium to NAV: 2.64%
As of March 31st, 2011, the SEC filing N-Q holds 44.2% in energy and energy services stocks. 49.3% of the fund is held in metals and metal mining stocks. This table, page 3 of the N-Q, shows typical covered call positions against GGN common stock holdings:

SPDR Barclays Capital High Yield Bond (NYSEARCA:JNK)
SPDR Barclays Capital High Yield Bond (JNK) provides a monthly income stream, albeit from junk bond holdings.

Exchange traded fund (ETF) JNK experienced an amazing year. The ETF has returned 19% through May 31st, 2011. As the name - High Yield Bond - implies, the ETF holds securities officially labeled as junk versus investment grade paper. This does not, however, mean the bonds do not offer promised repayment of the debt.

  • Annual Dividend Yield: 8.45%
  • Monthly Payment: 25-cents per month
  • Expense Ratio:
  • Market Cap: $7.39-billion

Disclosure: I am long ERF, GGN.