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 – all equities in this group of five monthly dividend stocks have delivered double-digit-percentage total returns over the past year.
Additionally, the one-year total return percentages exceed the equities’ respective dividend yields, which indicates that the share price of every equity on this list has risen in the past 12 months. Also, all but one of the five monthly dividend stocks have boosted their annual dividend payout at least for the last two years, and as much as the last five years. Listed in ascending order by their current dividend yield, below are the five monthly dividend stocks to buy now.
5 Best Monthly Dividend Stocks to Buy Now: #5
STAG Industrial, Inc. (NYSE:STAG)
Dividend Yield: 4.57%
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 its annual dividend payout amount every year since its formation eight years ago. The company’s current $0.119 monthly distribution corresponds to a 4.57% forward dividend yield.
In addition to offering a steady dividend income, the company also has enhanced its share price more than 18% over the trailing 12 months. Furthermore, the share price has nearly doubled since its five-year low in February 2016. The combined benefit of rising dividends and capital growth was a 24% total return over the trailing 12-month period. Additionally, the total returns were 57% over the last three years and 64% over the last five years.
5 Best Monthly Dividend Stocks to Buy Now: #4
EPR Properties (NYSE:EPR)
Dividend Yield: 5.48%
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. Despite a share price pullback driven by the overall market correction in late 2018, EPR Properties’ share price only dipped slightly and resumed its uptrend while still nearly 20% above its low from April 2018. The share price recovered its December losses before the end of January 2019 and continued its uptrend towards its two-year high in August 2019.
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. In addition to rising dividend payouts, steady capital gains provided a total one-year return of nearly 12%. The total return over the last three years was nearly 30% and exceeded 70% over the past five years.
5 Best Monthly Dividend Stocks to Buy Now: #3
Gladstone Investment Corporation (NASDAQ:GAIN)
Dividend Yield: 5.88%
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.
The company hiked its monthly payout three times during 2018 and twice during the past 12 months. In addition to its regular monthly distributions, Gladstone also distributed three extra dividends in 2017, two additional payments in 2018 and three special dividends year-to-date in 2019. Additionally, the company boosted its annual dividend payout every year since 2010. The company’s dividend payouts and asset appreciation combined for a total return of more than 50% over the trailing 12-month period. Shareholders more than doubled their investment with a 106% total return over the past three years and enjoyed a 151% total return over the past five years.
5 Best Monthly Dividend Stocks to Buy Now: #2
Stellus Capital Investment Corporation (NYSE:SCM)
Dividend Yield: 9.54%
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 $1.133 monthly payout is equivalent to a $3.60 annual dividend distribution and yields 9.54%. With flat monthly payouts since early 2012, the rising share price pushed the current dividend yield slightly below the company’s 11% five-year average.
Interested investors should act before the upcoming ex-dividend date on November 27 to ensure eligibility to receive the next round of dividend distributions on the December 13, 2019, pay date.
Because of a 40%-plus share price decline in 2015, dividend distributions contributed more than 92% of the 54% total return over the past five years. The total return over the trailing 12 months was 17%,as well as 63% over the last three years.
5 Best Monthly Dividend Stocks to Buy Now: #1
Whitestone REIT (NYSE:WSR)
Dividend Yield: 12.56%
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.
Since formation in 2010, the REIT has been distributing a flat $1.14 annual payout. This annual distribution payout corresponds to an 8.14% forward dividend yield, which is less than 4% below the REIT’s 8.4% five-year average.
The share price dropped more than 20% in late February and early March 2019. However, since that steep fall, the share price has fully recovered and closed on November 19, 2019, marginally higher than it was one year earlier. Dividend distribution payouts delivered most of the REIT’s total return of nearly 9% over the trailing 12 month period. However, the three-year total return was significantly higher at 31%.
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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.