Recurring dividend income can help boost your savings, help pay bills, and/or potentially even allow you to retire early. There's a significant incentive for building up a strong portfolio of high-yielding dividend stocks as the payoff could be huge in the long run.
And while most dividend stocks only pay you every three months, you can create a stream of recurring monthly income by investing in at least three of them that pay at different times within the quarter. If you invest $20,000 into Verizon Communications (NYSE: VZ), Organon & Co. (NYSE: OGN), and Bank of Nova Scotia (NYSE: BNS), you can build up a diverse portfolio while collecting $300 in dividends in every month of the year.
Verizon Communications
Investing in a top telecom provider like Verizon can be a great move for dividend investors. These businesses tend to generate a steady stream of revenue from their subscribers. While customers may switch back and forth between telecom companies, the bigger players know what levels to push to ensure long-term stability in their operations. Verizon is definitely no exception to that.
While there may be short-term volatility on occasion, historically, this has made for a fairly sound business to invest in. In each of the past three years, the company has generated more than $130 billion in revenue, and its operating profits are normally more than 20% of its top line.
Last month, Verizon increased its dividend for the 18th consecutive year. And with the increase, the stock is now yielding 6.2%. On a $20,000 investment, you'd be collecting a quarterly dividend of $310 every time the company makes a payment -- February, May, August, and November.
Organon & Co.
Organon is a healthcare company that focuses on women's health. It spun off from Merck in 2021, and since then it has been operating on its own.
Like Verizon, it too has made for a stable business to invest in, with annual revenue normally above $6 billion. Its operating margins are also fairly strong at more than 20%. This year the company expects revenue to come in within a range of $6.2 billion and $6.5 billion.
While Organon doesn't have a long track record of paying dividends, that is already a key reason investors may want to hold this stock in their portfolios. At 6.4%, it offers a yield that is close to five times the S&P 500 average of around 1.3%.
With its current yield, investing $20,000 into the stock would produce approximately $320 every quarter. Organon typically makes dividend payments every March, June, September, and December.
Bank of Nova Scotia
Another high-yielding stock to consider investing in today is the Bank of Nova Scotia, also known as Scotiabank. The Canadian-based bank is among the safer dividend stocks you can own. It has been paying a dividend for more than 190 years, with its first payment dating back to 1833.
Scotiabank last reported earnings in August. For the nine months ending July 31, its revenue totaled 25.1 billion Canadian dollars, which was up 5% year over year. Net income of CA$6.2 billion during that stretch also rose modestly by nearly 2% from the same period last year.
The bank's resiliency is evident through its impressive and continued ability to pay dividends during a variety of economic forces and market conditions. Even with interest rates coming down in Canada, the bank stock looks to be in solid shape.
U.S. investors will get some volatility in their dividends from the stock due to the impact of foreign exchange (the dividend is paid in Canadian dollars). However, with a dividend yield of around 5.9%, a $20,000 investment into Scotiabank should get you close to a $300 payout every time it makes payments, which is every January, April, July, and October.
Between Scotiabank and the other stocks on this list, investors who buy shares of all of these companies can ensure they're collecting a dividend every month of the year.
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*Stock Advisor returns as of October 21, 2024
David Jagielski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Merck. The Motley Fool recommends Bank Of Nova Scotia and Verizon Communications. The Motley Fool has a disclosure policy.
