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The fastest way to earn $1,000 in monthly dividends would be to invest heavily in high-yield stocks. But high-yield dividend investing isn't simple. There are tons of yield traps out there. You'll find many companies with over 10% yields, but these often come with weak underlying business fundamentals and a history of dividend cuts or suspensions. Who'd want to invest a fortune in such companies?
Since investing in high-yield dividends to earn a sizable monthly income is inherently risky, many beginner investors give up on the idea of making a decent income just by investing in dividends. But what if finding quality, high-yield dividend stocks with strong growth and safe payouts was possible?
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Let's examine some of the top stocks and ETFs with high dividend yields that might be suitable choices for those looking to build a portfolio that earns at least $1,000 in dividends per month.
Main Street Capital
Main Street Capital Corp (NYSE:MAIN) is a business development company, and BDCs are always worth your attention when it comes to dividend investing because of their high yields. What makes Main Street Capital special is its monthly dividends and stellar history of dividend growth. Earlier this month, Main Street Capital announced a supplemental cash dividend of $0.30 per share.
Main Street's business as a BDC is strong because it raises capital by selling notes and shares to the public and lends money to small- and mid-sized companies and earns interest income. Unlike many other BDCs, Main Street Capital also asks for equity stakes in the companies it lends to.
Ares Capital
With a dividend yield of about 9%, Ares Capital Corporation (NASDAQ:ARCC) is one of the best dividend stocks for any income portfolio to earn $1,000 a month. The company recently posted solid second-quarter results, as net investment income rose by 10% to $0.58 per share. The company is seeing strong deal volume amid elevated interest rates and a slowdown in the private equity market. In June, Ares Capital's transactions rose 40% from the prior quarter.
During a recent earnings call, Ares Capital's management revealed that it swapped its $850 million issued debt to a floating interest rate. With this move, Ares Capital positioned itself favorably for the upcoming rate cut cycle, as its interest burden will decrease with the expected ease in monetary policy.
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Hercules Capital
Another BDC on our list of the best dividend stocks to earn $1,000 per month in dividends fast, Hercules Capital Inc. (NYSE:HTGC) has a dividend yield of about 13%. Jefferies recently increased the stock's price target to $25 from $23, reiterating its Buy rating following second-quarter results. Net interest income in the quarter totaled $0.51, meeting estimates.
Hercules Capital has more than a decade of consistent dividend growth. Since 2019, the company has paid 16 special dividends. The company provides high-yield venture debt to early-stage biotech and software companies, and historically, Hercules' company selection has been solid, with a very low rate of defaults. The stock is up about 43% over the past five years.
NEOS S&P 500 High Income ETF (BATS:SPYI)
NEOS S&P 500 High Income ETF (BATS:SPYI) is a high-yield covered call ETF that pays monthly dividend income. It invests in some of the top S&P 500 companies and generates extra income by selling call options on stocks, generating extra premium income for shareholders. SPYI has a dividend yield of over 12%.
JPMorgan Nasdaq Equity Premium Income ETF (NASDAQ:JEPQ)
JEPQ is another high-yield covered call ETF that distributes monthly dividend income. The ETF invests in Nasdaq companies and generates extra income by selling call options. As of Aug. 8, JEPQ yields 9%.
Looking For Higher-Yield Opportunities?
The current high-interest-rate environment has created an incredible opportunity for income-seeking investors to earn massive yields, but not through dividend stocks... Certain private market real estate investments are giving retail investors the opportunity to capitalize on these high-yield opportunities and Benzinga has identified some of the most attractive options for you to consider.
For instance, the Ascent Income Fund from EquityMultiple targets stable income from senior commercial real estate debt positions and has a historical distribution yield of 12.1% backed by real assets. With payment priority and flexible liquidity options, the Ascent Income Fund is a cornerstone investment vehicle for income-focused investors. First-time investors with EquityMultiple can now invest in the Ascent Income Fund with a reduced minimum of just $5,000. Benzinga Readers: Earn a 1% return boost on your first EquityMultiple investment when you sign up here (accredited investors only).
Don't miss out on this opportunity to take advantage of high-yield investments while rates are high. Check out Benzinga's favorite high-yield offerings.
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This article The Fastest Way To Earn $1,000 in Dividends Per Month: Top 3 Stocks, 2 ETFs originally appeared on Benzinga.com