5 Best Monthly Dividend Stocks to Buy Now

Investors looking for a source of steady income payouts should consider one or more of the five best monthly dividend stocks to buy now, which offer above-average dividend yields and asset appreciation for robust total returns.

Investors value monthly dividend stocks because those equities offer more frequent income distributions than equities that deliver their dividend distributions in quarterly instalments. The monthly distribution frequency is particularly important to fixed-income investors, as they rely on these dividend distributions to cover their monthly expenses.

A steady income flow is an important goal of many investment portfolios. Investors can achieve high income payouts by seeking out and investing in equities with very high dividend yields. However, an investment portfolio must be well balanced, and even the most enthusiastic income investor will not risk capital gains losses that exceed dividend payouts just for the sake of high income payouts.

Share price fluctuations are significantly more volatile than dividend payout changes. Therefore, income investors must strike a balance between maximizing income from monthly dividend stocks and steady asset appreciation to avoid capital losses.

Even a dividend payout with a high growth rate can rarely overcome a rapid share price decline. Therefore, every investment portfolio — whether focused on income or asset appreciation — should include a well-balanced combination of equities that offer steady capital gains and reliable income payouts.

The list below, selected with a Dividend Screener tool available at DividendInvestor.com, is not just a list of equities with the highest yields. In addition to high dividend yields – which is the most common measure of an equity’s dividend distribution level – the stocks listed below needed to pass satisfy several more criteria. Below are the five best monthly dividend stocks to buy now:

5 Best Monthly Dividend Stocks to Buy Now: #5

STAG Industrial, Inc. (NYSE:STAG)     

Dividend Yield: 4.1%

Headquartered in Boston and incorporated in 2011, STAG Industrial, Inc. is an industrial real estate operating company focused on the acquisition, ownership and operation of single-tenant industrial properties throughout the United States. The company has boosted or maintained its annual dividend payout amount every year since its formation eight years ago. The company’s current $0.119 monthly distribution corresponds to a 4.1% forward dividend yield, and it has kept this distribution level since 2016.

In addition to offering a steady dividend income, the combined benefit of rising dividends and capital growth was a 42% total return over the trailing 12-month period. Additionally, returns were 75.5% over the last three years and a whopping 125.5% over the last five years.

5 Best Monthly Dividend Stocks to Buy Now: #4

Orchid Island Capital (NYSE:ORC)                                           

Dividend Yield: 12.6%

Orchid Island Capital is an investment firm specializing in mortgage-back securities across the United States. The company primarily invests in two categories: traditional Agency RMBS (residential mortgage-back securities) and structured RMBS. The company is based in Vero Beach, FL, and has a market capitalization of just $581 million.

Orchid Island Capital pays a monthly dividend of $0.06, corresponding to an annual distribution approximating $0.78 and a dividend yield of 12.6%. In addition to its uber high dividend distributions, the company has maintained stellar returns in the trailing 12 months, having grown 97.4% in the last year since the start of the COVID-19 pandemic. Its long-term returns are more modest but still impressive nonetheless, with a three-year return of 31.7% and a five-year return of 21.6%.

5 Best Monthly Dividend Stocks to Buy Now: #3

Gladstone Investment Corporation (NASDAQ:GAIN)                           

Dividend Yield: 6.2%

Headquartered in McLean, Virginia, and founded in 2005, the Gladstone Investment Corporation is a private equity fund specializing in lower middle market, acquisitions, buyouts, recapitalizations and debt refinancing. After dropping almost 85% in the aftermath of the 2008 financial crisis, Gladstone’s share price has recovered nearly 90% of its losses after advancing 470% from its all-time low in March 2009.

Despite a major drop in share price in March 2020, Gladstone Investment Corporation has maintained a steady monthly dividend distribution of $0.07, not including its frequent special dividends. This corresponds to a 6.2% yield and $0.84 annual payout. The company has one-year returns totaling 57.2% and five-year returns of 201.8%.

5 Best Monthly Dividend Stocks to Buy Now: #2

Stellus Capital Investment Corporation (NYSE:SCM)

Dividend Yield: 7.4%

Formed as a spin-off from the D. E. Shaw & Company in 2012, the Stellus Capital Investment Corporation is an externally managed, closed-end, non-diversified business development company. With Stellus Capital Management as its investment adviser, the Stellus Capital Investment Corporation has more than $1.6 billion in assets spread across 20 industries.

SCM’s current $0.08 monthly payout is equivalent to a $$1.00 annual dividend distribution and yields 7.4%. Although its dividend is slightly lower than its $0.11 payout maintained for the last several years, the company has already announced its dividends to be paid in February, March, and April 2021, indicating long-term viability for this high-yielding stock.

The company has rocketed in value in the trailing 12-month period, growing 79.1%. In the last five years, it has more than doubled, returning 124.9% to faithful investors.

5 Best Monthly Dividend Stocks to Buy Now: #1

Whitestone REIT (NYSE:WSR)

Dividend Yield: 4.4%

Whitestone is a community-centered retail REIT that owns and manages “e-commerce resistant” retail centers. The facilities are principally located in Phoenix, Austin, Dallas-Fort Worth, Houston and San Antonio. The REIT’s mix of national, regional and local tenants offers daily necessities, needed services and entertainment.

The REIT currently pays a monthly dividend of $0.04, equivalent to a yield of 4.4% and an annual payout of $0.42. Whitestone REIT has paid strong and consistent dividends while making a quick recovery from the drop in value caused by the COVID-19 pandemic in March 2020 — in the trailing 12-months, it has grown 63.2%.

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