1 perfect retirement stock with a 4.58% payout each month

For Aussies in retirement, investment in a good-quality ASX stock is key for growing your wealth. But finding a retirement stock that will hand out cash on a regular basis is even better.

It's easy to find a great dividend-paying ASX stock, but most of those only pay its investors every 6 or 12 months. Retirees want one which pays money every single month.

I've previously written about the fantastic benefits of BetaShares Dividend Harvester Active ETF (ASX: HVST) and the Metrics Master Income Trust (ASX: MXT). Both are dividend stocks which pay cash every single month. 

But there's another great monthly-paying retirement stock which I think all Aussies should have in their portfolio.

Plato Income Maximiser Ltd (ASX: PL8) 

Plato is a listed investment company (LIC) on the ASX which is focused on delivering high, reliable monthly income with franking credits from an actively managed, diversified portfolio of Australian shares. It is the first Australian Listed Investment Company targeting to pay monthly dividends.

Its investment strategy targets income-focused investors, specifically SMSF and pension-phase investors who want a reliable and consistent income stream. Its objective is to outperform (after fees) the S&P/ASX 200 Index (ASX: XJO) in total return terms including franking credits over the investment cycle, which is typically 3 to 5 years.

The ASX dividend stock holds a portfolio of mature ASX-listed equities, cash, and listed futures. Its portfolio mostly consists of Australian companies with strong dividend payouts, such as major banks, mining giants, and energy companies.

As of 31 October this year, its portfolio included holdings in major stocks such as BHP Group Ltd (ASX: BHP), CSL (ASX: CSL), Coles Group Ltd (ASX: COL)  and Commonwealth Bank of Australia (ASX: CBA). 

At the time of writing, Plato's top yielding stock, with a portfolio weight greater than 0.5% and an annual yield of 10.4%, is Beach Energy Ltd (ASX: BPT).

What does the retirement stock pay its investors each month?

Plato has consistently paid fully franked dividends of 0.55 cents per share every month since April 2022. The stock's dividend payment history dates back to October, when it paid out a slightly lower 0.45 cents per share.

That equates to an annual running total of 6.6 cents per share in full franked passive income.

At the current price of $1.44 per share (at the time of writing), that gives a trailing dividend yield of 4.58%.

Plato plans to keep its dividend yield steady too

In October, Plato told its investors that although franked dividend yields on Australian shares continue to modestly decline, it was able to increase the dividends it collected during the September quarter in order to hold the dividend steady at 0.55 cents for the remainder of the year.

In an ASX note the company explained that markets have continued their rally to all time highs, spurred by interest rate cuts earlier in the year. But the outlook for the cash rate is uncertain.

"Dividends declared during the August reporting season fell 2.2%, driven by cuts from mining and energy companies in contrast to dividend increases from the financial and industrial sectors. This has led to a further fall in the historical yield of the Australian market. Despite the uncertainty in the global economy, we expect to continue to receive solid dividends from a diversified portfolio of Australian companies in FY26," the listed investment company said in its ASX note. 

"One of the benefits of a closed-end listed investment company focused on income, such as PL8, is the ability to manage capital amidst uncertainty so as to provide regular dividend distributions over time. In the ongoing environment of economic uncertainty, liquidity and diversification are very important. By design, PL8's underlying portfolio is well diversified and very liquid. PL8's investment portfolio is well positioned to capture dividends from Australian companies."

The post 1 perfect retirement stock with a 4.58% payout each month appeared first on The Motley Fool Australia.

Motley Fool contributor Samantha Menzies has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended CSL. The Motley Fool Australia has recommended BHP Group and CSL. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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