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Top-Yielding Monthly Dividend Stocks

By Roberto Pedone

WINDERMERE, Fla. ( Stockpickr) -- Many market-players seek shelter from volatility in dividend-paying stocks, which offer investors a stream of steady income that can ease the pain of wild gyrations in the markets. And stocks that pay monthly dividends provide regular, consistent income to investors with usually less volatility than quarterly-paying dividend stocks.

The key to owning stocks that pay monthly dividends rather than quarterly or annual dividend stocks is that your invested capital comes back to you and your money compounds much more quickly.

Lots of investors are looking for monthly dividend payments to supplement their income during retirement. Other preretirement investors love to buy stocks that pay them cash on a monthly basis to help offset their high-risk investments. No matter what type of investor you are, dividend-paying stocks can go a long way toward creating wealth.

Dividend-paying stocks can also help an investor sleep better at night, because they're usually deemed to be safer investments than stocks that don't pay dividends.

The number of stocks that now pay a monthly dividend tops over 250, including real estate investment trusts, oil income trusts, closed-end funds and other investment vehicles that own a portfolio of income-producing assets and distribute cash generated by these assets every month to investors.

Let's take a look at four monthly dividend-paying securities that look promising.

If you're bullish on the future for oil and natural gas, you might want to take a look at the Enerplus Resources Fund (ERF - Get Report). This stock is an energy trust that controls operating subsidiaries to acquire, exploit and operate crude oil and natural gas assets. The company currently controls properties in red hot Marcellus Shale region in the northeastern U.S. Many industry insiders think the Marcellus Shale could be one of the most promising natural gas resources in the Appalachian Basin.

Enerplus Resources has the fifth-highest dividend yield of oil and gas production stocks, at 9.4%. The stock has near-term support around $20 a share and resistance at around $24.

If you think the real estate market is near a bottom, you should take a look at closed-end management investment company LMP Real Estate Income Fund (RIT), which invests in securities related to the real estate industry, tied to sectors such as office, health care, apartments, shopping centers and regional malls. Its current dividend yield is 8.7%.
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