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ASX dividend stocks that provide monthly passive income are a rarity on the Australian stock exchange. While not as scarce as hen's teeth, there are only a few of these elusive income generators available.
The vast majority of ASX 200 shares, including most popular blue chips, pay dividends biannually, with investors receiving income every six months. Some offer quarterly dividends, but monthly payers are even scarcer.
Among the monthly dividend stocks, my favorite is Plato Income Maximiser Ltd (ASX:PL8). Plato Income Maximiser is a listed investment company (LIC) that specializes in delivering fully-franked dividends to investors each month. Like most LICs, Plato is a company that manages a portfolio of underlying investments on behalf of its shareholders.
As of September 30, some of Plato's top 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 exchange-traded funds (ETFs), an LIC doesn't have to immediately distribute income received from its underlying investments. Instead, it can retain this income and pay it out at the most convenient times for investors. This allows an LIC to even out dividends over time, ensuring consistency in shareholder payments.
A 5% ASX dividend stock that pays monthly
This is why Plato Income Maximiser has consistently paid a fully-franked dividend of 0.55 cents per share every month for the past year.
This equates to an annual total of 6.6 cents per share, giving Plato Income Maximiser a trailing dividend yield of 5.55% at the current share price of $1.19. Including these fully franked credits, the annual yield grosses up to 7.93%.
Undoubtedly, this offers a compelling level of dividend income that investors can receive every month.
However, what truly stands out about Plato Income Maximiser is its overall performance metrics. Many dividend investments compromise overall performance for higher immediate income.
In my opinion, Plato is not one of them. As of September 30, its portfolio has achieved an average total return (capital growth, dividends, and franking) of 8.7% per annum. This compares to the 8.5% per annum that its S&P/ASX 200 Franking Credit Adjusted Daily Total Return Index benchmark has delivered over the same period.
Overall, this monthly dividend-paying income stock offers high levels of income from a diverse portfolio of ASX shares without sacrificing overall performance.
