ASX dividend stocks that pay their investors monthly passive income are pretty rare on the Australian stock exchange. They aren't quite as rare as hen's teeth, but there are only a handful of these elusive income machines available.
After all, the vast, vast majority of ASX 200 shares, including almost every popular blue chip, pays out a biannual dividend, with investors receiving a paycheque only every six months. There are a few that dole out quarterly dividends, but monthly payers are rarer again.
My favourite amongst those monthly dividend stocks is Plato Income Maximiser Ltd (ASX: PL8). Plato Income Maximiser is a listed investment company (LIC) that specialises in paying fully-franked dividends to its investors every month. Like most LICs, Plato is a company that holds a portfolio of underlying investments that it manages on behalf of its shareholders.
As of 30 September, some of Platos' top underlying holdings included:
- New Hope Corporation Limited (ASX: NHC)
- Woodside Energy Group Ltd (ASX: WDS)
- Fortescue Metals Group Limited (ASX: FMG)
- Metcash Limited (ASX: MTS)
- Westpac Banking Corp (ASX: WBC)
- Ampol Ltd (ASX: ALD)
Unlike an exchange-traded fund (ETF), an LIC doesn't have to pay out any income it receives from its underlying investments right away. Instead, it can hold this income and pay it out when it is most convenient for investors. In this way, an LIC can smooth out dividends over time to ensure consistency in its shareholder payments.
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A 5% ASX dividend stock that pays you every month
That's why Plato Income Maximiser has been able to fork out a fully-franked dividend of 0.55 cents per share every month for the past year.
That equates to an annual running total of 6.6 cents per share, which gives Plato Income Maximiser a trailing dividend yield of 5.55% at the current share price of $1.19. Including those full franking credits, that annual yield grosses up to 7.93%.
So that's obviously a compelling level of dividend income that investors can receive every month.
But why I really like Plato Income Maximiser is its overall performance metrics. There are many dividend investments out there that sacrifice overall performance for higher levels of immediate income.
Plato is not one of them in my view. As of 30 September, its portfolio has averaged a total return (capital growth, dividends and franking) of 8.7% per annum. That compares with the average of 8.5% per annum its S&P/ASX 200 Franking Credit Adjusted Daily Total Return Index benchmark has delivered over the same period.
So all in all, this monthly dividend-paying income stock is one that offers high levels of income derived from a diverse portfolio of ASX shares, but not at the expense of overall performance.
