Want to Collect $300 in Safe Monthly Dividend Income? Invest $32,850 Into These 3 Ultra-High-Yield Stocks.

With thousands of publicly traded companies and exchange-traded funds (ETFs) to choose from, investors have a myriad of ways to grow their wealth on Wall Street. But among these countless strategies, few have more consistently delivered for investors than buying and holding high-quality dividend stocks.

Companies that pay a regular dividend to their shareholders are typically profitable on a recurring basis and time-tested. Most importantly, they bring historical outperformance to the table.

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In The Power of Dividends: Past, Present, and Future, the analysts at Hartford Funds, in collaboration with Ned Davis Research, compared the performance of dividend stocks to non-payers over a 51-year period (1973-2024). What they found was a marked disparity in the return column, with dividend payers delivering an average annual return of 9.2%, compared to an average of 4.31% for non-payers, annually.

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While we often think of dividend payments as a quarterly event, there's a small group of public companies doling out their payments on a monthly basis. A few of these businesses are head-and-shoulders above their peers when it comes to their ultra-high-yields, as well as the safety of their payouts.

If you want to collect $300 in safe monthly dividend income, simply invest $32,850 (split equally, three ways) into the following three ultra-high-yield stocks, which sport an average yield of 10.96%!

AGNC Investment: 15.48% yield

The first high-octane monthly income stock that's been delivering a double-digit yield, with consistency, for more than a decade to its investors is mortgage real estate investment trust (REIT) AGNC Investment (NASDAQ: AGNC).

There's probably not an industry that Wall Street analysts have disliked more this decade than mortgage REITs. Companies like AGNC aim to borrow money at low short-term rates and use this capital to purchase higher-yielding long-term assets, such as mortgage-backed securities (MBSs). Because the industry is so sensitive to changes in interest rates and Federal Reserve monetary policy, the central bank's aggressive rate-hiking cycle from March 2022 to July 2023 weighed heavily on AGNC Investment and its peers.

But the tide has decisively turned in favor of mortgage REITs. The Fed is in the midst of a drawn-out rate-easing cycle and it's doing a good job of telegraphing any shifts in monetary policy. AGNC has typically performed its best during rate-easing cycles, which reduce short-term borrowing costs. As long as the Fed remains transparent with its policy, AGNC and its peers will have ample time to make adjustments to their portfolios to maximize profits.

Another key catalyst for AGNC Investment is its agency-focused portfolio. An "agency" security is one that's backed by the federal government in the event of default. AGNC closed out March with a $78.9 billion portfolio, $78 billion of which has been put to work in agency MBSs. While this added protection does weigh down the yield AGNC generates on the assets it's purchasing, it also allows the company to lever its portfolio in order to bolster its profit.

Lastly, the U.S. Treasury yield curve is no longer inverted. Yield-curve inversions, which involve shorter-dated Treasury bills sporting higher yields than long-dated Treasury bonds, tend to weigh on AGNC's net interest margin. A normalizing yield curve often leads to net interest margin and book value expansion for mortgage REITs.

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PennantPark Floating Rate Capital: 11.8%

Investors don't need to buy a large-cap company to generate safe, supercharged, monthly dividend income. Business development company (BDC) PennantPark Floating Rate Capital (NYSE: PFLT) has a modest $1 billion market cap, but packs a punch with its annual dividend yield approaching 12%.

BDCs are a type of business that invest in the debt or equity (common and/or preferred stock) of generally unproven companies, which are known as "middle-market companies." Though PennantPark did close out the March quarter with nearly $240 million in various common and preferred stock held in its portfolio, the $2.1 billion in debt it holds makes it a debt-focused BDC.

Focusing on debt comes with an assortment of advantages for PennantPark. First of all, most middle-market companies lack access to a full array of financial services. As a result, the weighted average yield on PennantPark's debt investments stood at a scorching-hot 10.5%, as of the end of March.

PennantPark's entire debt securities portfolio is also based on variable rates. When the nation's central bank increased interest rates aggressively in 2022 and 2023 to combat a historically high inflation rate, it sent PennantPark's weighted average yield on debt investments soaring. Even with the Fed in an aforementioned rate-easing cycle, the slow nature of the central bank's actions has allowed PennantPark to grow its loan portfolio and lock in superior yields.

Something else investors can appreciate about this relatively unknown monthly high-yielder is the lengths management has gone to protect invested principal. A top-tier vetting process has resulted in only a 2.2% delinquency rate for the company's loan portfolio, at cost. Further, an average investment size of $14.7 million (including common and preferred stock), spread across 159 companies ensures that no single investment is paramount to PennantPark's success or capable of sinking the proverbial ship.

Realty Income: 5.6% yield

The third ultra-high-yield stock that can help you collect $300 with an initial investment of $32,850, split equally among the trio, is retail REIT Realty Income (NYSE: O). Realty Income's 5.6% yield might appear modest next to AGNC and PennantPark, but neither of the other two companies have raised their monthly payout for 111 consecutive quarters like Realty Income has.

This is the premier company among retail REITs. When the first quarter came to a close, its commercial real estate (CRE) portfolio surpassed 15,600 properties, which is on track to produce more than $5 billion in annualized base rent.

One of the reasons Realty Income is so special is because more than 90% of the total rent it collects is resilient to recessions and e-commerce pressures. It primarily leases to brand-name, stand-alone businesses that draw consumer traffic in any economic climate. Some prime examples include grocery stores, drug stores, dollar stores, and automotive locations. Leasing to vetted companies that provide basic need goods and services ensures the rent continues to be paid regardless of how the U.S. economy is performing.

Additionally, Realty Income sports a quarter century of superior occupancy rates. Whereas the median occupancy rate for S&P 500 REITs is 94.2% since 2000, Realty Income has been 400 basis points better (98.2%) at its historical median occupancy rate since 2000. This is a testament to its long lease terms, the quality of its tenants (and the vetting process), and the company's prudent disposition activity.

To round things out, Realty Income is also, arguably, the cheapest of this ultra-high-yield dividend trio. Its forward-year multiple, relative to Wall Street's consensus cash flow estimate for 2026, is just 12.8, which represents a 21% discount to its average multiple to cash flow over the trailing-five-year period.

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Sean Williams has positions in PennantPark Floating Rate Capital. The Motley Fool has positions in and recommends Realty Income. The Motley Fool has a disclosure policy.