Dividend stocks make smart investments because they generate income for the stock owner. Some of the higher yielding stocks pay their dividends monthly. These monthly paying stocks can be a dependable source of supplemental income.

Monthly payers also give you more insight into the strength of the dividend. You’ll find out faster if the dividend is going to be cut or raised and you can evaluate a dividend on a monthly basis instead of quarterly.

We’ve pulled out 5 of the highest monthly paying dividend stocks that make smart investments.

GIM: Templeton Global Income Fund Yield: 9.2%

Templeton Global Income Fund is all about investing in income generating securities. They have a big yield of 9.3% which is below its 5 year dividend average of 10.7% indicating that this stock may be undervalued. Their dividend has been growing at 17% for the last 5 years. They have been paying dividends since 1990.

FLC: Flaherty & Crumrine/Claymore Yield: 8.6%

The objective of the Flaherty & Crumrine fund is to create income for it’s investors. And that is exactly what it does. The 8.6% yield is well below its dividend yield average. There could be a lot of upside for this stock. It’s dividend growth has been slim but did make an increase this year.

GOOD: Gladstone Yield: 8.2%

Gladstone is a REIT that works with industrial and commercial properties. It’s 8.2% yield is below the 5 year average of 10.3% showing this to be a value investment. The 5 year dividend growth is 7.5%. The payout ratio is high, but don’t be mislead, it is a REIT after all and the dividends have been steady since 2007.

PFO: Flaherty & Crumrine Preferred Yield: 8.2%

Flaherty and Crumrine preferred invests in preferred securities. The three year dividend growth rate is almost 5% and the current 8% yield is less than it’s 5 year average.

ERH: Evergreen Utilities Yield: 7.9%

Utilities are smart investments that often pay dividends. Evergreen has a great yield of almost 8%. Even though the dividend has been on the decline in the last year, this stock has been paying dividends every month since 2004.