5 Monthly Paying Dividend Stocks Yielding More Than 40%

These stocks don’t grow your portfolio. They pay your bills!

In a world where most dividend stocks yield between 2 and 4 percent, finding consistent double-digit income feels like hitting the jackpot. But today, we are not just talking about high yield. These stocks are yielding more than 40 percent annually, and they pay you every single month.

Yes, the number is real. And no, these are not your typical dividend aristocrats. These stocks operate using synthetic income strategies, primarily through options overlays, to generate aggressive cash flow based on the performance and volatility of popular underlying equities.

If you're focused on income or trying to build a cash flow portfolio that helps cover monthly expenses, this list should be on your radar.

Before we dive into the list, it’s important to understand how these funds actually generate such outsized income.

In a world where most dividend stocks yield between 2 and 4 percent, finding consistent double-digit income feels like hitting the jackpot. But today, we are not just talking about high yield. These stocks are yielding more than 40 percent annually, and they pay you every single month.

Yes, the number is real. And no, these are not your typical dividend aristocrats. These stocks operate using synthetic income strategies, primarily through options overlays, to generate aggressive cash flow based on the performance and volatility of popular underlying equities.

If you're focused on income or trying to build a cash flow portfolio that helps cover monthly expenses, this list should be on your radar.

Before we dive into the list, it’s important to understand how these funds actually generate such outsized income.

🧠 Understanding Synthetic Option Income Funds

The stocks in this list are not your classic dividend payers like Coca-Cola or Johnson & Johnson. These are synthetic income funds designed to extract income through short-term options. Most of the time, they use covered call strategies built on top of popular, high-volume stocks like Apple, Meta, or Amazon.

Here is how it works:

• The fund sells call options on the underlying stock
• It collects premiums from those options
• That premium is distributed to shareholders in the form of monthly income
• The fund does not actually hold shares of the underlying stock

This synthetic exposure allows the fund to mimic the price movement of the stock while harvesting premium from its volatility. It is an efficient, high-yield strategy — but it does not come without risk.

These funds are built for income, not long-term capital growth. In fact, they often experience price erosion over time because they cap upside potential in exchange for premium. That makes them great for monthly cash flow, but not ideal as core long-term holdings.

With that in mind, here are five of the highest-yielding, monthly-paying synthetic dividend stocks available right now.⚠️ Risks to Consider

While the income these funds generate can be incredibly attractive, they also carry specific risks that investors should understand before buying.

1. NAV Decline Over Time

These funds do not prioritize long-term capital growth. Because they regularly sell covered calls, they often cap upside potential and may underperform the underlying stock in bull markets. Over time, this can lead to net asset value erosion, especially if the fund pays out more than it can consistently earn in premium.

2. No Actual Ownership of Underlying Stock

These funds use derivatives to simulate exposure to companies like Apple, Amazon, or Microsoft. You do not actually own shares of the company, which means you miss out on stockholder rights and direct participation in long-term appreciation.

3. Income Volatility

The distribution amounts are not fixed. They vary depending on how much premium the fund can generate through its options strategy. If market volatility drops or option premiums shrink, the yield could decline significantly from month to month.

4. Tax Complexity

Because these funds rely heavily on options and short-term capital gains, they may be less tax-efficient than traditional dividend-paying stocks or ETFs. Investors using taxable accounts should consult a professional to understand the tax implications.

5. High Expense Ratios

These funds typically charge management fees of around 0.99 percent, which is significantly higher than traditional ETFs. While the yield offsets this in most cases, it is still a cost to be aware of.

6. Market Risk and Volatility

Some of the underlying stocks (like Coinbase or Meta) are known for sharp price swings. Even though the fund’s income is designed to smooth the ride, price fluctuations can still lead to capital loss, especially for short-term holders.

1. APLY – YieldMax AAPL Option Income Strategy ETF

• Underlying Stock: Apple Inc. (AAPL)

• Yield Range: Approximately 65%

• Distribution Frequency: Monthly

• Expense Ratio: 0.99 percent

APLY uses Apple’s stock price and volatility to generate weekly call premium, which it distributes to shareholders monthly. This fund is not designed to help you grow with Apple. It is built to pay you consistently by monetizing its daily price movement.

If you already own Apple and want income instead of capital gains, APLY is worth exploring.

2. AMZY – YieldMax AMZN Option Income Strategy ETF

• Underlying Stock: Amazon (AMZN)

• Yield Range: Over 67%

• Distribution Frequency: Monthly

• Expense Ratio: 0.99 percent

AMZY is similar to APLY but based on Amazon stock. While Amazon tends to be more volatile than Apple, that volatility creates larger option premiums. That makes AMZY a more aggressive income play, with potentially higher monthly distributions.

The flip side is that AMZY can swing harder during rough market weeks. This is a higher-risk, higher-yield income layer for the bold.

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