5 Best Monthly Dividend Stocks to Buy Now
By: Ned Piplovic,
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: 4.7%
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 4.7% 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 3.6% total return over the trailing 12-month period. Additionally, returns were 39.3% over the last three years and a whopping 138.7% over the last five years.
5 Best Monthly Dividend Stocks to Buy Now: #4
EPR Properties (NYSE:EPR)
Dividend Yield: –
Headquartered in Kansas City, Missouri, and founded in 1997, EPR Properties is a specialty REIT that invests in commercial properties primarily in the entertainment, recreation and education segments. Many of its investments are in ski resorts, theaters and other entertainment centers. its key revenue-driving states are Texas, Florida, New York and California.
Despite a dividend cut in the aftermath of the 2008 financial crisis and flat dividend distribution payouts for the entirety of 2009, the company offered its investors 18 annual dividend hikes and has enhanced its annual dividend payout amount 150% over the past two decades. The company has temporarily cut its dividend in response to the financial crisis of March 2020, but prior to this the company hiked its dividend distribution every year for the ten years prior.
EPR Properties suffered a dip in December 2020 and its quickly recovering. Although it has lost 42.4% of share value in the trailing 12 months, its has regained 23% YTD in January alone. Its gradual recovery over the last ten months may signal an increased likelihood to restart dividend payments once the stock stabilizes.
5 Best Monthly Dividend Stocks to Buy Now: #3
Gladstone Investment Corporation (NASDAQ:GAIN)
Dividend Yield: 7.9%
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 7.9% yield and $0.84 annual payout. Although the dip in early 2020 has marred its one-year returns, having lost 13.4%, in the long-term the company is still performing remarkably. Its returns in the last three years 24.7%, and in the last five, 135.4%.
5 Best Monthly Dividend Stocks to Buy Now: #2
Stellus Capital Investment Corporation (NYSE:SCM)
Dividend Yield: 9.2%
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 9.2%. 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 is currently trading at a discount, having lost 16.1% of its share value in the trailing 12 months. In the last three years, however, it has grown 16.4%. In the last five years, it has exactly doubled, returning 100.0% to faithful investors.
5 Best Monthly Dividend Stocks to Buy Now: #1
Whitestone REIT (NYSE:WSR)
Dividend Yield: 5.0%
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 5.0% and an annual payout of $0.42. It has announced its next two dividends (both at the same $0.04 rate) to be paid on February 11, 2021, and March 11, 2021.
Whitestone REIT has paid strong and consistent dividends despite its unfortunate drop in share price in the trailing 12 months, losing 34.6% of its value. Long-term returns are far more favorable, having rewarding investors with 21.6% growth in the last five years. It is also reasonable to believe WSR is at least 13% undervalued and likely to grow in the near future to reflect this.
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Ned Piplovic is the assistant editor of website content at Eagle Financial Publications. He graduated from Columbia University with a Bachelor’s degree in Economics and Philosophy. Prior to joining Eagle, Ned spent 15 years in corporate operations and financial management. Ned writes for www.DividendInvestor.com and www.StockInvestor.com.