Sound Point Meridian Pays Monthly Dividends
When most investors think of dividend income, they automatically assume quarterly payments. To say the least, that’s the standard. Take a look at big names such as Coca-Cola Co (NYSE:KO), Proctor & Gamble Co (NYSE:PG), and Verizon Communications Inc (NYSE:VZ); they all stick to the typical three-month dividend schedule.
But for investors who want more frequent income, dividends don’t always cut it. But that’s where Sound Point Meridian Capital Inc (NYSE:SPMC) could help.
SPMC stock offers monthly dividends, which could be a huge advantage for income-focused investors. Monthly paychecks make budgeting easier and provide more flexibility.
And with SPMC stock currently yielding north of 16%, this little-known cash-generating machine deserves a closer look.
What Does Sound Point Meridian Capital Do?
At its core, Sound Point Meridian Capital is an income-focused investment company that’s structured as a closed-end fund. Its primary goal is to generate high current income for shareholders, while offering some potential for capital appreciation over time.
So, how does it do that?
Sound Point Meridian invests in the equity and mezzanine tranches of collateralized loan obligations (CLOs) backed by U.S. senior secured loans. Think of CLOs as pools of corporate loans, packaged and sold in different layers of risk and return. The equity and mezzanine tranches typically carry higher yields, which is how Sound Point Meridian can offer such a generous dividend.
Furthermore, the company might also sometimes invest in loan accumulation facilities.
What is a loan accumulation facility?
Think of it as a storage box for loans. Before a group of loans gets bundled and sold to investors (in the form of a CLO), they sit in this box for a short time. This helps the company collect enough loans to create one big investment package later. (Source: “Overview,” Sound Point Meridian Capital Inc, last accessed July 2, 2025.)
SPMC Stock Pays Monthly with Some Predictability
One of the biggest attractions of SPMC stock is its monthly dividend payout. For income-focused investors, this is a huge plus compared to traditional quarterly dividend stocks.
Instead of waiting three months, SPMC stockholders get paid every single month. That means more frequent cash flow, faster reinvestment opportunities, and potentially more control over how and when to use your dividend income.
Something else that really sets SPMC stock apart is the predictability that comes with these dividends. For instance, after reporting its latest quarterly results, Sound Point Meridian Capital announced the exact dividend amounts for July, August, and September: $0.25 per share.
This is a big deal. Investors don’t have to guess what their income will look like over the next quarter, or if the dividend income will be uneven. This level of transparency and visibility is rare in the high-yield space.
Assuming that SPMC stock continues to reward investors with $0.25 per share per month, that’s annual income of $3.00 per share. As for dividend yield, that amounts to 16.80%.
Chart Courtesy of StockCharts.com
SPMC Stock: A Well-Managed Company
In the world of investing in complex assets like CLO equity and loan accumulation facilities, management isn’t just important; it’s critical. It won’t be wrong saying that, without good management, this sort of investment could be a ticking timebomb.
That’s where Sound Point Meridian Capital stands out.
The company’s latest financial results offer a glimpse into how capable the management team is. For the most recent quarter ended March 31, 2025, Sound Point Meridian generated $13.4 million in net investment income, or about $0.66 per share. Total investment income for the quarter amounted to $22.7 million and total expenses were $9.3 million.
Even more impressive: the company reported $21.8 million in cash distributions from the investment portfolio. It also deployed $12.3 million into a new CLO equity investment. (Source: “Sound Point Meridian Capital, Inc. Announces Second Fiscal Quarter 2026 Common Distributions and Preferred Distributions and Results for the Fourth Fiscal Quarter Ended March 31, 2025,” Sound Point Meridian Capital Inc, May 29, 2025.)
At quarter-end, the company, through its CLO investments, had indirect exposure to about 1,600 unique underlying loans. The largest obligor represented just 0.5% of the loans, and the top 10 largest obligors together represented 4.1% of the loans. In other words, Sound Point Meridian is well diversified.
The Lowdown on SPMC Stock
For investors seeking high monthly income, SPMC stock offers an attractive combination of yield and professional management. At the current price, it has a dividend yield that’s close to 17% with payments coming monthly.
To reiterate, Sound Point Meridian focuses on CLO equity, mezzanine tranches, and loan accumulation facilities, all built around U.S. senior secured loans. This puts it in a sweet spot and, if yields remain higher for longer, it could benefit big-time.
Recent financial results show strong net investment income and consistent cash flow generation. The company’s management has been active in deploying capital into new opportunities, and showing they are hard at work.
Lastly, know that, like any high-yield investment, SPMC stock does come with risks, with one of the biggest being that CLO equity sits lower in the capital structure. This means that Sound Point Meridian could face losses if defaults in the underlying loan pool rise sharply.