Want $3,500 per Year in Passive Income Paid Monthly? Invest Just $2,500 in These Dividend Stocks

According to the Internal Revenue Service (IRS), passive income generally includes earnings from rental activity or any trade, business, or investment in which the individual does not materially participate. It can also include income from limited partnerships, stocks, bonds, and other similar enterprises in which the investor is not actively involved. The more passive income can help cover rising costs, such as mortgages, insurance, taxes, and other expenses, the easier it is for investors to set aside money for future needs as they prepare for retirement. Dependable, recurring dividends, especially those paid monthly, are a recipe for success.

Our 24/7 Wall St. passive income stock research database is a reliable source of the best investment ideas for generating passive income. Here, we have identified nine ultra-high-yield stocks that pay investors their dividends monthly. Investing just $2,500 in each, for a total of $22,500, will yield almost $290 per month in passive income, totaling $3,480 annually. As a caveat, these stocks are better suited for those with higher risk tolerance. Note that these figures are current as of the date this post was written and may vary slightly, either higher or lower, when published.

Why we recommend monthly income stocks

In a world where prices seem to be consistently rising, a monthly check makes sense for many who have bills and expenses due on a 30-day basis. Items such as mortgage payments, rent, utility bills, trash collection, and even grocery bills are always due each month, and a steady stream of passive monthly income can be a significant help in meeting those obligations.

AGNC Investment

AGNC Investment Corp. (NASDAQ: AGNC) provides private capital to the U.S. housing market. This company has paid solid monthly dividends for years. AGNC Investment enhances liquidity in the residential real estate mortgage markets and, in turn, facilitates home ownership in the United States.

The company invests primarily in agency residential mortgage-backed securities (agency RMBS) on a leveraged basis.

These investments consist of residential mortgage pass-through securities and collateralized mortgage obligations for which a U.S. government-sponsored enterprise guarantees the principal and interest payments.

AGNC buys debt from the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac). Together, Fannie Mae and Freddie Mac are known as the GSEs, or government-sponsored enterprises. Alternatively, AGNC may purchase debt from a U.S. government agency, such as the Government National Mortgage Association (Ginnie Mae).

$2,500 buys 276 shares, which pay $1.44 per share each year, or $0.12 per month. That equals $33 in passive income every 30 days.

ARMOUR Residential REIT

ARMOUR Residential REIT Inc. (NYSE: ARR) is another company that invests in RMBS in the United States. With a substantial dividend yield and years of consistent performance, this company is an ideal choice for a monthly dividend investment. It securities portfolio primarily consists of securities issued or guaranteed by the U.S. government-sponsored entities and the Government National Mortgage Association.

These bonds are backed by fixed-rate, hybrid adjustable-rate, and adjustable-rate home loans, as well as unsecured notes and bonds issued by the GSE and the U.S. Treasury, and money market instruments.

$2,500 will purchase 148 shares, which pay $2.88 each year, or $0.24 per month, totaling $36 per month.

Dynex Capital

Dynex Capital Inc. (NYSE: DX) is an internally managed mortgage REIT that also invests in mortgage-backed securities (MBS). It finances its investments principally with repurchase agreements.

Its objective is to provide attractive risk-adjusted returns to its shareholders over the long term that are reflective of a leveraged, high-quality fixed-income portfolio with a focus on capital preservation.

The company aims to deliver returns to its shareholders primarily through the payment of regular dividends and capital appreciation of its investments.

Dynex Capital primarily invests in agency MBS, of which over 97% are agency RMBS, including to-be-announced (TBA) securities. The remainder of its investment portfolio consists of agency commercial mortgage-backed securities (agency CMBS) and agency and non-agency CMBS interest-only securities.

$2,500 buys 200 shares, which yield $2.04 per year, $0.17 per month, or $34 every 30 days.

Ellington Financial

This firm has been at the forefront of data-driven investing since its founding in 1994. The high-quality mortgage REIT is a favorite among Wall Street investors. Ellington Financial Inc. (NYSE: EFC), through its subsidiary Ellington Financial Operating Partnership, acquires and manages mortgage-related, consumer-related, corporate-related, and other financial assets in the United States.

The company develops and manages RMBS backed by:

• Prime jumbo
• Alt-A, manufactured housing, and subprime residential mortgage loans
• RMBS for which the principal and interest payments are guaranteed by a U.S. government agency or a U.S. government-sponsored entity
• Residential mortgage loans
• Commercial mortgage-backed securities
• Commercial mortgage loans and other commercial real estate debt

Ellington Financial also provides collateralized loan obligations, mortgage-related and non-mortgage-related derivatives, corporate debt and equity securities, corporate loans, and other strategic investments. The company offers consumer loans and asset-backed securities backed by consumer and commercial assets.

$2,500 buys 188 shares, which pay $1.56 per share each year, which is $0.13 per month. That equals $25.50 in passive income every 30 days.

Horizon Technology Finance

Horizon Technology Finance Corp. (NASDAQ: HRZN) is a venture lending platform that provides structured debt products to life sciences and technology companies. With a gigantic dividend, this stock has tremendous upside potential. The business development company specializes in lending and investing in development-stage companies.

It focuses on making secured debt and venture lending investments to venture capital-backed companies in these industries:

• Technology
• Life science
• Healthcare information and services
• Cleantech
• Sustainability

Horizon Technology Finance is a leading venture lending platform that offers structured debt products to life science and technology companies. Its experienced investment and operations team has provided debt capital to some of the most exciting companies for decades.

$2,500 buys 342 shares, which yield $1.32 per year, or $0.11 per month. That translates to $37.62 in income every month.

Orchid Island Capital

Orchid Island Capital Inc.’s (NYSE: ORC) investment portfolio consists of two categories of agency RMBS:

• Traditional pass-through agency RMBS, such as mortgage pass-through certificates and collateralized mortgage obligations issued by the government-sponsored enterprise
• Structured agency RMBS, such as interest-only securities, inverse interest-only securities, and principal-only securities, among other types of structured agency RMBS

Its business objective is to provide attractive risk-adjusted total returns to its investors over the long term through a combination of capital appreciation and the payment of regular monthly distributions. The company intends to achieve this objective by investing in and strategically allocating capital between pass-through agency RMBS and structured agency RMBS.

$2,500 buys 350 shares, which yield $1.44 per year, or $0.12 per month. That translates to $42 in income every 30 days.

Oxford Square Capital

Oxford Square Capital Corp. (NASDAQ: OXSQ) is a closed-end, non-diversified management investment company. This company pays a huge dividend, which could result in a substantial total return home run if the stock moves higher.

It is a private equity and mezzanine firm that invests in both public and private companies. It invests in secured and unsecured senior debt, subordinated debt, junior subordinated debt, preferred stock, common stock, and syndicated bank loans.

Oxford Square Capital primarily invests in debt and/or equity securities of technology-related companies that operate in these sectors:

• Computer software
• Internet
• Information technology infrastructure and services
• Media, telecommunications, and telecommunications equipment
• Semiconductors
• Hardware
• Technology-enabled services
• Semiconductor capital equipment
• Medical device technology
• Diversified technology and networking systems sectors

$2,500 will buy 1,005 shares that pay $0.42 per year, or $0.035 per month, which translates to $35.20 in annual income.

Prospect Capital

Prospect Capital Corp. (NASDAQ: PSEC) is a leading provider of flexible private debt and equity capital. Hedge funds love this top business development company, and the gigantic dividend makes it another potential total return home run. Prospect Capital specializes in:

• The middle market, mature, mezzanine finance
• Later stage, emerging growth
• Leveraged buyouts
• Refinancing, acquisitions, and recapitalizations
• Turnaround
• Growth capital
• Development, capital expenditures, and subordinated debt tranches of collateralized loan obligations
• Cash flow term loans
• Marketplace lending and bridge transactions

It also invests in the multi-family residential real estate asset class. The fund invests in secured debt, senior debt, senior and secured term loans, unitranche debt, first-lien and second-lien debt, private debt, private equity, mezzanine debt, and equity investments in private and microcap public companies.

$2,500 buys 687 shares, which pay $0.54 per year, or $0.045 per month, or $31 every 30 days.

Stellus Capital

Stellus Capital Investment Corp. (NYSE: SCM) is another business development company that specializes in investments in private, middle-market companies. With yet another substantial dividend and trading near a 52-week high, this stock is poised to break out in 2025.

It invests through first-lien, second-lien, unitranche, and mezzanine debt financing, often with a corresponding equity investment.

The fund prefers to invest in the United States and Canada, seeking companies with an EBITDA between $5 million and $50 million.

$2,500 will buy 187 shares, which pay $1.60 per year, or $0.13 per month, for a total of $24.31 per month.

Need $16,500 per Year in Passive Income? Invest $25,000 in These 4 Ultra-High-Yield Stocks

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