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Want More Monthly Income? Invest in These 3 Stocks

By David Jagielski – Oct 15, 2021 at 7:00AM

Key Points

  • AbbVie, Enbridge, and BCE all pay attractive yields -- the lowest one is 4.8%.
  • They have all been raising their dividend payments in recent years, and there's little reason to doubt that they will continue increasing their payouts.
  • All of these businesses are also sound financially and make for good long-term investments.

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They all pay more than double what you'll get with the average stock in the S&P 500.

Whether you're a retiree looking to help pay your bills or you just want to save up for your next vacation, everyone can use some extra cash every month. And one way you can generate more money for your portfolio is by investing in dividend stocks. Few dividend stocks pay on a monthly basis, but you can still collect cash every month by investing in stocks that pay at different periods.

Below, I'll show you how investing just over $22,000 across three stocks -- AbbVie (ABBV 0.08%), Enbridge (ENB 0.64%), and BCE (BCE -0.67%) -- can generate at least $100 in cash for your portfolio every month.

One person showing a chart to another person across a desk.

Image source: Getty Images.

AbbVie

Biopharmaceutical company AbbVie is a big name in the healthcare industry with revenue topping more than $50 billion over the past 12 months. And with a profit margin of 12% on that, the company has plenty of income at its disposal to share with investors. 

Today, AbbVie pays a quarterly dividend of $1.30 per share, which yields 4.8% annually, well above the S&P 500 average of less than 1.3%. Its payments are made every February, May, August, and November. And if you were to invest roughly $8,300 into AbbVie, you could expect to collect $100 in each of those months. And there's a good chance you'll be earning more over time as AbbVie has been increasing its payouts over the years. In 2016, its quarterly payment was only $0.57, and it has gone on to more than double since then.

That doesn't mean you should expect that to happen over the next five years, but with AbbVie expanding its operations with the acquisition of Botox maker Allergan, a deal that closed in May of last year, there are plenty of growth opportunities for the business. AbbVie anticipates that its adjusted per-share earnings will top more than $12 this year, strong enough to support its current payout, which totals just $5.20 per share on an annual basis.

Enbridge

Investors in pipeline company Enbridge will earn the highest payout on this list, at 6.3%. It makes payments to shareholders every March, June, September, and December. And if you want to collect $100 from those payments, you'll need to invest roughly $6,350 into the stock today. Like AbbVie, Enbridge has also been generously increasing its dividend over the years. Since 1995, the company has raised its payouts by an average of 10%. If the company were to maintain that rate of increase into the future, it would take eight years for your dividend to double in value.

Enbridge offers investors safety through its long-term contracts, and the business has posted a profit in each of the past five years; over the trailing 12 months, its profit margin sits comfortably at more than 15% of revenue. For the current year, the company projects that its distributable cash flow (a metric that oil and gas companies often use to help assess performance) will total 4.70 Canadian dollars ($3.80) on a per-share basis. Based on that, the company's dividend, which pays CA$3.34 annually, looks to be safe.

Plus, Enbridge expects its Line 3 pipeline to be fully operational before the end of this month. The pipeline replaces old infrastructure that has been in place for decades, and it will also add capacity: 370,000 additional barrels of oil per day can be transported between Alberta, Canada, and Wisconsin once the project is complete (bringing the total number of barrels per day to 760,000). Enbridge says the Line 3 replacement project can help generate significant growth in earnings before interest, taxes, depreciation, and amortization (EBITDA), which can pave the way for more dividend increases.

BCE

Telecom company BCE will pay you a dividend every January, April, July, and October. Its 5.4% yield would require a $7,400 investment for you to collect $100 every time it makes a dividend payment.

You won't see much fluctuation with this stock, and that's a good thing if your priority is the dividend. Although BCE did generate 6.4% revenue growth in its most recent quarter (for the period ending June 30), that has more to do with the impact of COVID-19 a year ago, when its stores were impacted by lockdowns and travel was down (which would have affected roaming charges). Revenue of CA$22.9 billion in 2020 was down 4.5% from the previous year and was the lowest the company reported since 2017, when its top line was CA$22.7 billion.

But with BCE being one of the top telecom companies in Canada and consistently reporting profit margins of at least 11% annually, it still makes for a safe dividend stock to invest in. It has raised its quarterly payments by 28% over the past five years, and with free cash flow of CA$3.4 billion over the past 12 months being above the CA$3.2 billion that it has paid out in dividends during that time, there's still room for this payout to continue growing.

David Jagielski owns shares of BCE Inc. The Motley Fool owns shares of and recommends Enbridge. The Motley Fool has a disclosure policy.

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