Although some stocks only pay out cash on an annual or semi-annual basis, there are some options that provide monthly payments. As a result, the accumulation and compounding benefit of this can swiftly boost an investor’s portfolio.

Details of the business

One example of a company with regular income is the TwentyFour Select Monthly Income Fund (LSE:SMIF). The stock’s up 6.6% over the past year, and has a dividend yield of 8.46%. As the name suggests, the dividends get paid monthly.

Before we dive into more details about the income, let’s understand more about what the fund does. As part of investor information, it aims to “take advantage of the premium returns available from less liquid instruments across the debt spectrum“.

In easier-to-understand terms, it buys corporate bonds, asset-backed securities and other similar products. In return for buying these types of loans and debt, it gets paid a return as interest. Given that it focuses on slightly more risky types of debt, it gets paid a premium rate of interest.

This is good for an income investor, as the yield’s well above the average for the FTSE 100 and FTSE 250. It’s also reassuring that the share price had gained over the past year. Sometimes, a high yield’s only elevated because the share price is falling. This isn’t sustainable for income in the future.

Noting risky assets

Of course, with a yield this high, there are risks involved. The main one comes from the potential for loan defaults from the portfolio. As the fund buys risky assets, the higher rate of interest compensates for the higher potential for a company not paying back the debt. The latest market update from January flagged up higher volatility in asset prices due to President Trump. This potentially poses issues going forward which need to be managed carefully.

Fortunately, defaults haven’t been large in the history of the fund from the information I can see. Yet it only takes a couple of companies to have serious financial problems to have a negative impact on the fund, and therefore the share price.

Income potential

If an investor put £7k in the stock today, they’d stand to get paid some cash fairly imminently. Yet if this income was reinvested, it could allow the overall investment to compound faster. Even without putting anymore fresh capital in, after a decade, the value of the investment could be worth £16,263. In theory, the following year this would equate to a monthly payment of £119.17.

Granted, planning this far out is difficult. These are just assumptions and forecasts that can change. But the benefit of an investor including a monthly income stock can be high, and therefore worthy of consideration.

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An uncommon option

One way’s purchasing shares of firms that do pay monthly income. This is rare, but some cases do exist. For example, let’s consider the TwentyFour Select Monthly Income Fund (LSE:SMIF). It’s a stock I like and would consider adding it to my portfolio.

The fund invests in fixed income products such as bonds and other loans, which pay out cash to the fund. As a result, the fund’s always receiving cash proceeds from these investments. It can then use this money to pay out as a dividend to shareholders.

It can afford to do this on a monthly basis because it has a large enough portfolio with a spread of different assets. The portfolio managers aim to select the bonds that have the most attractive valuation, thus allowing the highest potential dividend yield for investors. At the moment, the dividend yield’s 8.77%. This is even more impressive when I note that the stock’s risen by 14% over the past year.

One concern is that some of the debt it purchases is quite risky. In order to get paid such a high interest rate versus the current base rate, the managers have to accept some risk that the borrower might default. Should a default occur, it would negatively impact the share price.

A well-rounded portfolio

Another way I can get paid monthly is by holding a diversified portfolio of dividend stocks. For example, let’s say I bought a dozen shares for my pot. In theory, if they all had different reporting periods and different dividend payment dates, I could easily bank one dividend a month.

Holding a multitude of stocks helps me not just in the frequency of getting paid, it also reduces my risk. If I just invested all my money in the TwentyFour Select Monthly Income Fund and it cut the dividend, my entire cash flow would be disrupted. Yet if I hold a dozen or more stocks from a range of different sectors, things change. If one of the dozen cut its dividend, my overall income will still be negatively impacted, but not as much.

Of course, there’s some hassle involved in researching and buying a host of different stocks. But I’ll be building a pot for the long term. So once things are up and running, the portfolio’s overall maintenance should be quite passive in nature.

Potential numbers

As an indication of how I could build things, let’s assume I manage to invest a lump sum of £500 in 12 stocks to begin with. From there, I top up £100 in four of the stocks each month. I’m going to assume I have an average dividend yield of 6.5%.

After doing this and reinvesting the proceeds for a decade, in the following year I could stand to make £452 a month from the dividends.

The post Monthly dividend stocks? Here’s how I could bank a frequent second income appeared first on The Motley Fool UK.

One way I’ve used for a while is making and reinvesting dividends from stocks. Here are two ideas that are top of my watchlist right now.

A rare monthly income option

The first one is the TwentyFour Select Monthly Income Fund (LSE:SMIF). It has a current dividend yield of 8.77%, with the share price up 15% over the past year.

It’s a unique stock as it pays out income each month. Usually, companies pay out income once or twice a year. Yet the fund manager, TwentyFour, is able to achieve monthly payments thanks to the broad portfolio of bonds and other debt products that it owns.

It aims to buy undervalued bonds and income generating assets to deliver a dividend of at least 6% per year. The fact that this is one of the primary goals of the fund makes it very appealing for an investor like me that has that specific aim.

Aside from the high yield and the consistent monthly cash flow, I also like the stock because it focuses on investing with strict ESG criteria. This means that the companies it deals with make a clear effort with regard to environmental, social, and governance goals.

As a risk, some of the bonds and other credit products are illiquid. That means that it’s not easy to buy or sell them quickly. This could pose a problem if the firm needs to act quickly.

The potential comeback kid

A second stock that has caught my eye is abrdn (LSE:ABDN). The stock is down 28% over the past year, with a current dividend yield of 8.7%.

Don’t get me wrong, the business has been struggling for several years. It has seen investors pull money out of the funds, with general macroeconomic uncertainty blamed. However, in my view some of the blame also lies internally, with the firm not that well run.

Although continued outflows of client money remains a risk, the departure of the CEO Stephen Bird at the end of June could be a catalyst for change. His four years at the company unfortunately correlate well with the demise of the share price. A change at the top, to shake things up and start a transformation, should be a really good thing.

Recent indications also point to a turning point. Q1 assets under management (AUM) grew by £800m, in contrast to the same quarter a year before which saw AUM drop by £6.2bn.

For income investors, I’m not worried about an immediate dividend cut. The dividend per share of 14.6p has been the same since 2020. If the management team wanted to cut to save money, they would have done so already.

Therefore, when I put everything together, I think that it could be a great value buy right now. The dividend yield is high, and the current share price is low.

I like both ideas and have them on my watchlist to buy when I have free cash.

The post 2 stocks yielding 8%+ that are brimming with second income potential appeared first on The Motley Fool UK.

A long-term property play

The first company is the Balanced Commercial Property Trust (LSE:BCPT). The FTSE 250-listed firm currently has a dividend yield of 6.33%. Over the past year, the stock’s down a modest 7%.

The trust was launched back in 2005, so it has a long track record. It holds a portfolio of commercial property around the UK, ranging from office blocks to industrial warehouses. From the lease agreements and rental income, it can provide regular dividend payment to shareholders.

These payments have been consistent over the past decade, with some still made even during the pandemic. This bodes well for the future, especially now that I think we’re over the worst of the slump in the broader property sector.

A risk is that with the rise in remote working, demand from clients for office space could fall in the coming years. This is true, but I like the diversified scope of the portfolio, so it’s not purely reliant on office tenants.

When I look at the track record, I think this is a stock I could see myself buying and holding for the next decade.

An eye-catching 9% yield

Next up is the TwentyFour Select Monthly Income Fund (LSE:SMIF). As the name suggests, it pays out dividends each month. TwentyFour is the asset manager that runs the fund, with this particular one focusing on bonds and fixed income securities.

It targets less liquid assets in the bond market. Although this can be a potential risk due to it being harder to buy and sell something like this, it does mean there can often be large value opportunities. As a result, it tries to provide a return to shareholders not only through the coupon payments, but also through price appreciation from whatever it buys.

Over the past year, the share price is up 4%, with a current dividend yield of 9%. This makes it very attractive to me, in that I can benefit from this yield in monthly instalments. I don’t have to wait for a lump sum once or twice a year.

The fund isn’t huge, with a market-cap of £196m. But even if it expands, I think it can cope with managing more assets without it hindering the investment strategy that’s been working well in the past.

Both stocks look very appealing and I’m seriously considering buying them for my portfolio.

The post 2 monthly income shares I’d buy and hold for the next decade appeared first on The Motley Fool UK.

Dividends are never guaranteed and depend on a company’s profits and balance sheet strength. But many shares listed on the London Stock Exchange intend to make a dividend payment to their shareholders. This is the reward they offer individuals for investing in them.

Most income stocks make these payments every three, six, or 12 months. But there are a handful of UK shares that hand out dividends on a monthly basis. And those stocks can be an excellent source of income.

How do monthly dividend stocks work?

A monthly dividend stock simply chooses to pay a dividend more regularly to its shareholders. But note that the frequency with which they make dividend payments doesn’t translate into higher returns. This is a mistake that some new investors can make.

Let’s consider the case of Company A. This income stock can choose to pay a £1 dividend to its shareholders twice a year, or it can choose to reward investors semi-annually and to dish out two £6 payments. 

Either way, the company will make a total dividend payment of £12. The return is exactly the same. The only thing an income investor needs to consider is how often they wish to receive their cash.

Investors can use a company’s online resources to learn how often it pays dividends. This information can be found in the dividend history section of a firm’s corporate website, for example, or in a company’s annual report.

What UK companies pay monthly dividends?

Investors only have a small selection of monthly dividend stocks to choose from in the UK. There are around 1,500 companies currently listed on the London Stock Exchange. Yet only a small subset of these pay dividends each month.

The lion’s share of UK stocks that pay monthly dividends are real estate companies, investment trusts, and exchange-traded funds (ETFs).

Property businesses usually receive their rents every four weeks or so, and therefore have the capacity to distribute dividends at the same frequency. This is the same for an investment trust that is focused on the real estate market. These are known as real estate investment trusts (REITs).

Top UK monthly dividend stocks

Let’s look at some monthly dividend stocks that UK investors can buy today.

TwentyFour Select Monthly Income Fund 

The TwentyFour Select Monthly Income Fund is a closed-ended investment fund. This sort of mutual fund issues a set number of shares at the time of its initial public offering (IPO). They are also actively managed, unlike open-ended mutual funds.

A major difference between closed and open-ended is the use of leverage. Funds like TwentyFour Select Monthly Income can use leverage to purchase assets. On one hand, this can boost long-term returns. But investors need to be aware that taking on debt also increases the risk they face.

This particular fund is focused on acquiring fixed-income credit securities in the UK and Europe. Its portfolio comprises a mix of corporate bonds, asset-backed securities, high-yield bonds, bank capital, Additional Tier 1 securities, leveraged loans, and payment-in-kind notes.

Financial instruments with a higher chance of default offer better interest rates. However, such investments also raise the potential for the fund to incur big losses.

JPMorgan USD Emerging Markets Sovereign Bond UCITS

As its name implies, the JPMorgan USD Emerging Markets Sovereign Bond UCITS ETF is an ETF. These financial instruments are bought and sold on stock exchanges and are baskets made up of certain securities. Such funds can hold assets like shares, bonds, commodities, and currencies.

A major advantage for investors is that these funds spread risk by holding a variety of different securities. However, their complexity means that they can be hard to understand for new investors.

This ETF from JP Morgan operates a portfolio of government and quasi-government bonds across developing markets. At the last count in November 2025, its portfolio held 347 different holdings.

The JPMorgan USD Emerging Markets Sovereign Bond UCITShas a truly global focus. Turkey, Brazil, South Africa, and Colombia are all among its top 10 holdings. 

Investment vehicles like this offer individuals the chance to capitalise on fast-growing markets. However, the political and economic landscape in emerging nations can also be volatile. Government bonds are less risky than corporate bonds, but they can still expose investors to higher risk than bonds from developed countries.

Are monthly dividend stocks safe?

UK shares that pay monthly dividends aren’t necessarily more or less safe than those that distribute cash on a quarterly or six-month basis.

Investors still need to carry out the same checks as they would on any other dividend-paying stock. For example, ensure that predicted dividends are well covered by anticipated earnings (dividend coverage of two times and above provides a wide margin of safety). Selecting stocks with strong balance sheets and robust cash flows is also important. 

Which UK stocks pay monthly dividends?

Typically, businesses will only pay dividends to shareholders annually, semi-annually, or quarterly. This decision is entirely at the discretion of the management team, as is their ability to cancel dividends if needed.

However, what if investors want to receive dividends every month, similar to how fixed-income investors can receive coupons? In this scenario, investors can turn to mutual funds and exchange-traded funds.

There are several funds listed on the London Stock Exchange which are structured to pay shareholders dividends on a monthly schedule, funded by their own investment portfolios.

As of February 2026, this list includes:

Are monthly dividend stocks a good investment?

The obvious advantage of selecting monthly dividend stocks is that an income investor doesn’t have to wait to receive their payout.

This can be especially important for those who depend on dividend income for everyday living. For example, it can make budgeting easier as an individual can expect a cheque every four weeks or so.

Prioritising monthly dividend stocks can also be useful for individuals looking to reinvest their money. Frequent dividends mean they are more likely to have cash on hand to seize on an investment opportunity. 

What’s more, the sooner an investor receives their dividend, the more quickly they can reinvest it and get their money working for them. In other words, a monthly dividend will boost someone’s long-term wealth thanks to the beauty of compounding.

One final advantage of monthly dividend stocks is that investors don’t have to hold onto a share for too long just to receive their payout. This has an obvious advantage if, for example, an individual needs to raise capital or if they suspect a bear market could be on its way. They can be a great investment if your priorities align with the benefits above. Be sure to evaluate your personal investing goals before you make your decision.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

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