53 Monthly Dividend Stocks
Whether you are actively growing wealth for the future, or you have already made the transition to retirement, assets that generate monthly income should be at the core of your investment strategy. Alongside fixed income investments, you should probably be invested in monthly dividend stocks.
In this article (and associated download), you will find my list of over 50 stocks that pay monthly dividends.
Table of Contents
- How Do Monthly Dividend Stocks Work?
- The Benefits of Monthly Dividends
- How to Invest in Monthly Dividends Stocks
- Where to Find Monthly Dividend Stocks
- 5 Of the Best Monthly Dividend Stocks for 2020
- What Are The Risks of Investing Monthly Dividend Stocks?
Resource Download: Get the FREE REPORT Including All 53 Monthly Dividend Stocks
Remember, the list of stocks that pay monthly dividends is changing all the time. Sometimes, companies suspend their dividend payout due to difficult trading conditions such as we have seen with the coronavirus pandemic. Others simply change their dividend distribution strategy.
I have included as many individual monthly dividend stocks in this list as possible. I have also purposefully excluded some companies that pay monthly dividends that are generally considered too risky for income investors. Among these exclusions are oil and gas royalty trusts. I just consider those types of stocks to be too volatile, especially considering the current economic circumstances.
How Do Monthly Dividend Stocks Work?
Dividends are simply a share of company profits, distributed to each shareholder. Most companies pay dividends annually or quarterly, whereas monthly dividend stocks pay shareholders every month.
Not all public companies pay dividends. Some prefer to reinvest 100% of their profits to grow the business. Of around 3,000 publicly-listed companies that do pay dividends regularly, only around 50 pay their shareholders every month.
Some of the most common types of monthly dividend-paying stocks are:
- Real Estate Investment Trusts (REITs)
- Business Development Companies (BDCs)
- Royalty Trusts
- Master Limited Partnerships (MLPs)
These types of companies collect their operational income on monthly basis, and so distribute their profits to shareholders accordingly.
How Are Monthly Dividends Paid?
Monthly dividends work in exactly the same way as quarterly and annual dividends. A proportion of company profits is distributed to shareholders on a per-share basis in the form of a dividend payout. So, every stockholder receives a dividend payment relative to the amount of stock they own in the company.
For example, if a company has 10 million shares outstanding, and declares a monthly dividend of 25 cents, the total dividend payment would be $2.5 million. If you owned 5,000 shares of this stock, you would receive a dividend payment of $1,250 for that month.
Assuming the company paid out the same 25 cent/share dividend every month for one year, and the stock value was $50 per share, your total annual dividend income would be $3 per share (25 cents x 12). Your annual yield in this case would be 6% ($3/$50).
The Benefits of Monthly Dividend Stocks
Monthly dividend income, along with interest from fixed income investments, is an invaluable tool for growth investors and income-seekers alike.
For those transitioning to (or already in) retirement, stocks that pay monthly dividends offer consistency and regularity. This allows for better planning of household finances, and helps to cover regular monthly expenses.
If you are still growing your wealth, having fresh dollars to reinvest on a monthly basis is extremely valuable. Why? because the more frequently you have income to reinvest, the more powerful the effect of compound interest becomes.
How To Invest in Monthly Dividend Stocks
If there were a way to reliably, accurately and consistently pick good investments, it would not be a secret. The formula itself would have made it’s inventor rich beyond all comprehension by now. That said, there is a great deal you can do to narrow down your stock selection process in the hop of picking solid long-term investments.
Investors and analysts commonly use data from a company’s financial statements to collate a set of ratios. These ratios can then be used to assess the financial health of the company.
Here are some of the key ratios to take into account when assessing any stock for potential investment:
- Price-to-Book Ratio
- Price-to-Earnings Ratio
- PEG Ratio
- Dividend Yield
Essentially the price to book ratio represents the value of a company as the sum of its parts. I.e. the sum total of the value of its individual assets should they be broken up and sold separately. These assets includes things like real estate, equipment, and investments such as holdings in other companies.
The book value of financial firms such as Business Development Companies can fluctuate because the assets they hold can also fluctuate in value (stock in other companies, for example).
Companies of a more industrial nature tend to have a more stable book value as it is based on hard assets such as real estate and machinery. These types of assets also depreciate annually in the company accounts.
Regardless of the type of company, investors are usually looking for a low price-to-book ratio. This means the stock price is more reflective of the raw asset value of the company, and is not over inflated.
Price to Earning Ratio
The price-to-earnings ratio is a key metric for investors. It defines the stock price in relation to the earnings of the company. This is crucially important in identifying overpriced stock, and therefore a good buy/hold/sell indicator for investors.
If a stock price shoots up because of some great piece of news or PR, but the company does not have the earnings to support that inflated price, then the price will – at some point – fall back into line.
One important thing to consider is that price-to-earnings ratios tend to be similar for companies operating in the same or similar sectors. So, one should really only compare apples with apples, so to speak.
Investors tend to think of the price-to-earnings ratio as the length of time a stock investment will take to repay your initial purchase price of the stock. For example, a stock price of $10 with an earnings per share of $1 will take 10 years to pay back the purchase price of the stock – assuming of course that nothing changes in the interim.
The PEG Ratio
In addition to the price-to-earnings ratio, investors use price to earning growth as a further measure of the financial health of a company. The PEG ratio takes in to account previous years earnings growth. While it is speculative, this is a great way to compare one similar company with another.
Quite simply, the PEG ratio is calculated by dividing the price-to-earnings ratio by the annual growth rate of the company’s earnings. The lower the PEG ratio, the better the stock price in relation to it’s projected future earnings.
The higher the PEG ratio, the more you are paying for future (estimated) growth. A stock with a PEG of 2 costs twice as much (for growth) compared with a stock with a PEG of 1.
The PEG ratio plotted on a chart gives you a snapshot of previous price-to-earnings ratio, which can then be used to make predictions for future growth.
As we are looking specifically at stocks that pay monthly dividends, yield should be a key factor in your stock selection process.
Dividend yield is simple. It is calculated as the total amount of annual dividends divided by the stock price, expressed as a percentage. A stock priced at $10 per share with a total annual dividend of $0.50 cents, has a dividend yield of 5% (0.50/10=0.05).
Some of the things dividend investors look out for are:
- Companies that pay out around half of their annual profits (or less) to shareholders. You want to invest in companies that reinvest at least 50% of their profits for future growth.
- Stocks with yields of between 4 per cent (4%) and 6 per cent (6%). That’s pretty solid income performance.
- Companies that have a good recent history on generating profits consistently for at least 3 years.
- Companies that have a long history of increasing their dividend payouts every year.
Taking into account all of these ratios, you will be well-positioned to make informed investment decisions. I will add a list of useful websites and resources at the end of this article to help with your research.
Where to Find Monthly Dividend Stocks
If you’ve got this far, you’re probably of a mind to add some monthly dividend stocks to your portfolio. But where to find them? Well, as I mentioned right at the start of this article, there is no definitive list of stocks that pay their dividends monthly. As the economy and market evolves, monthly dividends stocks will come and go as some companies pause investor distributions while others start.
Here is a an up to date list (August, 2020) of stocks that pay monthly dividends. You can download the list direct to your inbox for future reference right here.
Remember, I have excluded oil and gas royalty trusts die to the high level of risk and volatility associated with those stocks.
Ultimate List of 50+ Stocks That Pay Monthly Dividends
|Stock Ticker||Company||Stock Price||Dividend Yield|
|BRMK||Broadmark Realty Capital, Inc.||$9.18||3.8%|
|AFIN||American Finance Trust, Inc.||$7.36||14.4%|
|AGNC||AGNC Investment Corp.||$13.65||13.1%|
|APLE||Apple Hospitality REIT, Inc.||$8.89||8.8%|
|ARR||ARMOUR Residential REIT, Inc.||$9.38||17.2%|
|AVAL||Grupo Aval Acciones y Valores SA||$4.69||7.3%|
|CHP-UN.TO||Choice Properties REIT||$12.72||5.8%|
|CHR.TO||Chorus Aviation Inc.||$2.40||N/A|
|CLDT||Chatham Lodging Trust||$5.46||15.7%|
|CLNC||Colony Credit Real Estate, Inc.||$6.56||22.5%|
|CPTA||Capitala Finance Corp.||$2.22||44.2%|
|CRT||Cross Timbers Royalty Trust||$6.30||15.3%|
|D-UN.TO||Dream Office REIT||$19.99||4.99%|
|DIR-UN.TO||Dream Office REIT||$10.91||6.43%|
|DX||Dynex Capital, Inc.||$15.51||12.2%|
|EFC||Ellington Financial, Inc.||$12.03||14.03%|
|EIF.TO||Exchange Income Corporation||$27.13||8.4%|
|GAIN||Gladstone Investment Corp.||$9.31||8.8%|
|GECC||Great Elm Capital Corp.||$4.47||21.4%|
|GLAD||Gladstone Capital Corp.||$7.28||11.2%|
|GOOD||Gladstone Commercial Corp.||$18.22||8.1%|
|GORO||Gold Resource Corp.||$4.39||0.6%|
|GROW||U.S. Global Investors, Inc.||$3.31||0.8%|
|GWRS||Global Water Resources, Inc.||$10.65||2.7%|
|HCAP||Harvest Capital Credit Corp.||$3.99||24%|
|HRZN||Horizon Technology Finance Corp.||$11.57||10.4%|
|IPL.TO||Inter Pipeline Ltd.||$13.13||3.7%|
|ITUB||Itaú Unibanco Holding SA||$5.38||7.8%|
|LAND||Gladstone Land Corp.||$16.21||3.3%|
|LTC||LTC Properties, Inc.||$38.64||5.9%|
|MAIN||Main Street Capital Corp.||$30.20||8.1%|
|MTR||Mesa Royalty Trust||$4.19||19.1%|
|O||Realty Income Corp.||$60.30||4.5%|
|ORC||Orchid Island Capital, Inc.||$5.03||18.9%|
|OXSQ||Oxford Square Capital Corp.||$2.75||28.6%|
|PBA||Pembina Pipeline Corp.||$24.56||7.2%|
|PBT||Permian Basin Royalty Trust||$3.42||13%|
|PFLT||PennantPark Floating Rate Capital Ltd.||$8.40||13.5%|
|PRT||PermRock Royalty Trust||$2.06||30.9%|
|PSEC||Prospect Capital Corp.||$5.01||14%|
|PVL||Permianville Royalty Trust||$1.08||26%|
|RNW.TO||TransAlta Renewables Inc.||$15.06||6.24%|
|ROYT||Pacific Coast Oil Trust||$0.37||88%|
|SBR||Sabine Royalty Trust||$29.51||9.9%|
|SJR||Shaw Communications, Inc.||$18.16||6.6%|
|SJT||San Juan Basin Royalty Trust||$2.26||4/9%|
|STAG||STAG Industrial, Inc.||$32.79||4.7%|
|SUNS||Solar Senior Capital Ltd.||$12.63||11%|
|VET||Vermilion Energy, Inc.||$4.18||45.2%|
5 Of the Best Monthly Dividend Stocks for 2020
If you are looking for some more specific advice, here is my shortlist (in no particular order) comprising my personal top 5 picks of monthly dividend stocks for 2020.
Note: This is not an offer or recommendation to buy these stocks. These are my personal picks based on my own analysis and circumstances. You should seek proper qualified advice before making any investment.
Realty Income (NYSE: 0) is a REIT specializing in multi-purpose retail properties such as gas stations. It has a well-diversified and resilient portfolio, and has a strong track record of increasing dividends. With an annual yield of 4.53%, and total annualized returns of more than 15% p.a. since it’s IPO, Realty Income makes a great addition to a monthly income investment strategy. You can read my analysis of this stock here.
Shaw Communications (NYSE: SJR) is a leading Canadian telecoms provider. It has businesses in mobile, internet and traditional telephony, producing more than $4 billion in annual revenue. Currently delivering an annual yield of 6.6% for shareholders, you can read my analysis of Shaw Communications here.
TransAlta Renewables is a holding company that owns assets producing renewable energy. Having shown reslience and even growth through the coronavirus crisis, the 6.6% annual yield and monthly dividend schedule is appealing. You can read my analysis of this stock here.
I like STAG Industrial (NYSE: STAG) because this specialized REIT owns industrial real estate that forms an essential (and growing) part of the global supply chain. As the world economy moves more and more online, logistics, warehousing and distribution real estate that is well-located and fit for purpose will continue to thrive. STAG pays dividends monthly, and has a yield of 4.7%. You can read my analysis of STAG here.
Main Street Capital
If you want to own stocks that pay monthly dividends, adding a Business Development Company (BDC) to your portfolio is probably a good idea. One of my favourites is Main Street Capital (NYSE: MAIN). Main currently offer an annualized dividend yield of 8.1%. You can read my analysis of MAIN here.
What Are The Risks of Investing Monthly Dividend Stocks?
Whether you want regular monthly income to reinvest, or to draw down and live on, monthly dividend stocks should certainly form part of your overall investment strategy.
Of course, as with any investment there are risks. Many stocks that pay monthly dividends are highly speculative investments. If you are buying a stock purely for it’s monthly payout, you should still conduct your due diligence as you would with any other stock. After all, you want to won financially sound businesses that will still be around in 10 years time.
This Month’s Dividend is Based on Last Month’s Income
Because monthly dividend payouts are usually contingent on a company’s monthly income, there is a higher risk that dividends could be paused or halted altogether if the underlying business encountered problems. Paying dividends on a monthly basis contingent on the business collecting all of their monthly revenue (often rents and/or interest).
Because of this, there is a risk that monthly dividend distributions might be disproportionately affected by a recession. A lack of rents, defaults on loans and other operational difficulties would have an almost instant affect on a company’s ability to continue to pay monthly dividends.
Cash Starved and Low Growth Potential
As most profits are paid out to shareholders, little cash is retained, or reinvested for growth. This means that monthly dividend payers often fuel growth with debt. Whilst using leverage like this is often par for the course with some asset classes such as real estate, it can make a company’s financials look shaky when the market experiences a downturn.
Final Thoughts on Monthly Dividend Stocks (for now…)
If you’ve reached the end of this article, congratulations. You have staying power. This will serve you well if you decide to add monthly dividend stocks to your portfolio because you will need to do your homework!
Not all stocks are created equal. Some carry more risk than others, and it is always true that bigger returns equate to bigger risks. Remember, the return on your investment is your reward for the risk you took.
Monthly dividend stocks can (and probably should) form at least a part of your overall portfolio. But, of course there are other option to consider. the JOBS Act in 2012 opened up a host of investment opportunities to the general public, many of which had previously been accessible only by wealthy accredited investors.
You can buy performing mortgage notes which pay income monthly. There are also plenty of peer to peer lending sites that facilitate unsecured loans between investors and borrowers. It is highly likely that a good mix of traditional assets such as stocks, and alternative investments such as notes and other monthly income investments will deliver the most attractive blend of risk and reward for your portfolio.
Monthly Dividend Stock Investor Resources
Stock Analysis Tools and Resources
- Price to Book Ratio
- Price to Earnings Ratio
- PEG Ratio
- Dividend Yield
- Sure Dividend
- Yahoo Finance