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Want $1,000 per Year in Passive Income? Invest $10,000 Into These Dividend Stocks
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24/7 Wall St. Insights
- Passive income is a steady stream of unearned income that doesn’t require active traditional work.
- Ultra-high-yield stocks that pay monthly dividends are a solid idea for generating passive income.
- Passive income is simple: own quality dividends that pay you for doing nothing. Don’t miss out on our brand-new “7 Things I Demand in a Dividend Stock” report. It includes two A++ dividend stocks and how to spot future dividend winners that can put your returns on hyperdrive.
According to the Internal Revenue Service (IRS), passive income generally includes earnings from rental activity or any trade or business in which the individual does not materially participate. It can also include income from limited partnerships and other similar enterprises where the individual is not actively involved.
Our 24/7 Wall St. passive income stock research database is a reliable source of the best investment ideas. We have identified eight ultra-high-yield stocks that pay investors their dividends every month. Investing $10,000 in each, for a total of $80,000, will pay out almost $1,000 per month in passive income. As a caveat, these stocks are better suited for those with higher risk tolerance.
Why we recommend monthly income stocks
In a world where prices seem to be consistently rising, a monthly check makes sense for many who have bills and expenses due on a 30-day basis. Items like mortgage payments or rent, utility bills, trash collection, and even grocery bills are always due each month, and a steady stream of passive monthly income can be a huge helping hand to meet those obligations.
AGNC Investment
This company has paid solid monthly dividends for years; its current yield is 14.10%. AGNC Investment Corp. (NASDAQ: AGNC) is a real estate investment trust (REIT) in the United States.
The company invests in residential mortgage pass-through securities and collateralized mortgage obligations for which a United States government-sponsored enterprise or agency guarantees the principal and interest payments.
$10,000 buys 980 shares, which pay $1.44 per share each year, which is $0.12 per month. That equals $117.60 in passive income every 30 days.
ARMOUR Residential REIT
With a massive 14.10% dividend yield and years of solid performance, this company is a perfect monthly dividend idea. ARMOUR Residential REIT Inc. (NYSE: ARR) invests in residential mortgage-backed securities (MBS) in the United States.
Its securities portfolio primarily consists of securities issued or guaranteed by the United States Government-sponsored entity (GSE) and the Government National Mortgage Administration backed by fixed-rate, hybrid adjustable-rate, and adjustable-rate home loans, unsecured notes and bonds issued by the GSE and the United States treasuries, and money market instruments.
$10,000 will purchase 500 shares, which pay $2.88 each year or $0.24 per month, which equals $120 per month.
Dynex Capital
Paying a hefty 13.38% dividend, Dynex Capital Inc. (NYSE: DX) is a passive income champion for more aggressive investors. It is a mortgage real estate investment trust that invests in MBS on a leveraged basis in the United States.
It invests in agency and non-agency mortgage-backed securities (MBS), including residential, commercial, and interest-only securities. Agency MBS has a guarantee of principal payment by a U.S. government agency or a U.S. government-sponsored entity, such as Fannie Mae and Freddie Mac.
$10,000 buys 802 shares, which pay $1.56 per year, $0.13 monthly, or $104.26 monthly.
Ellington Financial
This quality mortgage REIT company is a favorite across Wall Street and pays a massive 12% dividend. Ellington Financial Inc. (NYSE: EFC), through its subsidiary, Ellington Financial Operating Partnership LLC, acquires and manages mortgage-related, consumer-related, corporate-related, and other financial assets in the United States.
The company develops and manages residential mortgage-backed securities (RMBS) backed by:
- Prime jumbo
- Alt-A, manufactured housing, and subprime residential mortgage loans
- RMBS for which the principal and interest payments are guaranteed by the U.S. government agency or the U.S. government-sponsored entity
- Residential mortgage loans
- Commercial mortgage-backed securities
- Commercial mortgage loans and other commercial real estate debt
Ellington Financial also provides collateralized loan obligations, mortgage-related and non-mortgage-related derivatives, corporate debt and equity securities, corporate loans, and other strategic investments. The company offers consumer loans and asset-backed securities backed by consumer and commercial assets.
$10,000 buys 765 shares, which pay $1.56 per share each year, which is $0.13 per month. That equals $99.45 in passive income every 30 days.
Orchid Island Capital
With a stunning 17.65% dividend, this stock will help pay the monthly bills easily. Orchis Island Capital Inc. (NYSE: ORC) is another specialty finance company that invests in residential mortgage-backed securities (RMBS) in the United States.
The company’s RMBS is backed by single-family residential mortgage loans, referred to as Agency RMBS. Its portfolio includes traditional pass-through Agency RMBS, such as mortgage pass-through certificates and collateralized mortgage obligations, and structured Agency RMBS comprising interest-only, inverse interest-only, and principal-only securities. The company has elected to be taxed as a REIT for the United States federal income tax purposes.
$10,000 buys 1685 shares, which pay $1.44 per year or $0.12 monthly. That translates to $205 in income every 30 days.
Oxford Square Capital
This company pays a huge 14.43% dividend, which could result in a substantial total return home run if the stock moves higher. Oxford Square Capital Corp. (NASDAQ: OXSQ) is a business development company that operates as a closed-end, non-diversified management investment company.
It is a private equity and mezzanine firm that invests in both public and private companies. It invests in secured and unsecured senior debt, subordinated debt, junior subordinated debt, preferred stock, common stock, and syndicated bank loans.
Oxford Square Capital primarily invests in debt and/or equity securities of technology-related companies that operate in the computer software, Internet, information technology infrastructure and services, media, telecommunications and telecommunications equipment, semiconductors, hardware, technology-enabled services, semiconductor capital equipment, medical device technology, diversified technology, and networking systems sectors.
$10,000 will buy 3425 shares that pay $0.42 per year or $0.035 monthly, which translates to $120 in income.
Prospect Capital
Hedge funds love this top business development company, and the gigantic 13.74% dividend makes it a potential total return home run. Prospect Capital Corp. (NASDAQ: PSEC) specializes in the middle market, mature, mezzanine finance, later stage, emerging growth, leveraged buyouts, refinancing, acquisitions, recapitalizations, turnaround, growth capital, development, capital expenditures and subordinated debt tranches of collateralized loan obligations, cash flow term loans, market place lending, and bridge transactions.
It also invests in the multi-family residential real estate asset class. The fund makes secured debt, senior debt, senior and secured term loans, unitranche debt, first-lien and second-lien, private debt, private equity, mezzanine debt, and equity investments in private and microcap public businesses.
$10,000 buys 1890 shares, which pay $0.72 per year or $0.06 monthly, or $113.40 per month.
Stellus Capital
With an 11.72% yield and trading close to a 52-week high, this stock could break out soon. Stellus Capital Investment Corp. (NYSE: SCM) is a business development company specializing in investments in private middle-market companies.
It invests through first-lien, second-lien, unitranche, and mezzanine debt financing, often with a corresponding equity investment.
The fund prefers to invest in the United States and Canada and seeks to invest in companies with an EBITDA between $5 million and $50 million.
$10,000 will buy 731 shares, which pay $1.60 per year or $0.13 monthly. That will bring in $97.50 per month.
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