7 Monthly Dividend Stocks to Buy Now
By: Ned Piplovic,
The only type of investment that income investors like more than equities that deliver a steady flow of quarterly dividend distributions are monthly dividend stocks.
While the ultimate goal of income investing is a portfolio that delivers a constant flow of income payments, even the most ardent income investor will not invest blindly into equities based solely on a high dividend yield.
Share price movements occur on much larger orders of magnitude than dividend hikes or even dividend cuts. Even a rapidly rising dividend payout can rarely compensate for a fast share price decline. Therefore, every investment portfolio — whether income-based, or asset-appreciation-based — should include a core of equities that offer reliable long-term capital growth, as well as a steady income flow.
The list below, selected with a Dividend Screener tool available at DividendInvestor.com, is not just a list of equities with the highest yields. The dividend yield is the most common measure of an equity’s dividend distributions. However, this group of seven monthly dividend stocks to buy now had to meet additional criteria.
Below is the list of seven monthly dividend stocks to buy now, presented in ascending order by their current dividend yield.
7 Monthly Dividend Stocks to Buy Now: #7
Realty Income Corporation (NYSE:O)
Dividend Yield: 4.6%
Headquartered in San Diego and listed on the New York Stock Exchange (NYSE) since 1994, the Realty Income Corporation operates as a real estate investment trust (REIT) in the commercial real estate market. The company has delivered nearly 600 consecutive monthly dividend payouts in its 50-year history. Additionally, since converting to a REIT in 1994, the company has enhanced its annual payout every year by delivering nearly 100 annual dividend boosts — an average of nearly four dividend increases per year.
Its current dividend is the same $0.23 monthly distribution the company has maintained since the start of 2019. It corresponds to a $2.81 annual dividend payout and a healthy yield of 4.6%.
7 Monthly Dividend Stocks to Buy Now: #6
Gladstone Land Corporation (NASDAQ:LAND)
Dividend Yield: 3.3%
Headquartered in McLean, Virginia, and founded in 2005, the Gladstone Land Corporation is a publicly traded REIT that invests in farmland and farm-related properties located in major agricultural markets in the United States, which it leases to unrelated third-party farmer-tenants.
The REIT enhanced its annual dividend payout for the past six consecutive years, albeit slowly. Its current five-year growth rate is 2.4% and the company pays a monthly dividend of $0.04. This corresponds to an annual distribution of $0.54 and a yield 3.3%.
7 Monthly Dividend Stocks to Buy Now: #5
STAG Industrial, Inc. (NYSE:STAG)
Dividend Yield: 4.6%
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 boosted its annual dividend payout amount every year since its formation in 2011. The current $0.12 monthly distribution is equivalent to a 4.6% forward yield.
In addition to a steady dividend income, the company also enhanced its share price over the last few years. While its total returns in the trailing 12 months were an underwhelming 4.3%, the share price improved 40.4% in the last three years and an impressive 140.7% in the last five.
7 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. It determines new investments based on value and opportunity of the respective industry, as well as location quality and the reputability of tenants.
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.
7 Monthly Dividend Stocks to Buy Now: #3
Main Street Capital Corporation (NYSE:MAIN)
Dividend Yield: 7.3%
Based in Houston and incorporated in 2007, the Main Street Capital Corporation is a business development company specializing in long-term equity and debt investments in small and lower middle market companies. Main Street Capital had the misfortune of incorporating right before the 2008 financial crisis and its share price lost more than 40% of its Initial Public Offering (IPO) level by early 2009. However, the share price more than quadrupled since reversing trend in March 2009.
While the long-term trend delivered share price appreciation — 76.8% in the last five years — the company has suffered an 18.6% dip in the trailing 12 months, making its total returns for the year an estimated 11.3% loss. Its dividend, however, has stayed level and reliable. Main Street Capital Corporation pays out a monthly $0.20 dividend, equivalent to a $2.46 annual payment and yielding 7.3%.
7 Monthly Dividend Stocks to Buy Now: #2
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%.
7 Monthly Dividend Stocks to Buy Now: #1
Great Elm Capital Corporation (NASDAQ:GECC)
Dividend Yield: 30.3%
Headquartered in Boston and established in 2016, the Great Elm Capital Corporation is a business development company that specializes in loan and mezzanine, middle-market investments in media, healthcare, telecommunication services and communications equipment. GECC is managed by Great Elm Capital Management, which is a wholly-owned subsidiary of Great Elm Capital Group, Inc. (NASDAQ:GEC).
Although the company pays an impressive dividend, investors should express some caution — as always — when considering ultra-high dividend yield numbers. Great Elm Capital pays an excellent $0.08 monthly distribution as has continued to do so throughout financial crises. Its dividend yield of 30.3%, however, has been somewhat inflated by a sudden loss of capital in the trailing 12-month period — its share price declined 47.9%, bringing total returns to a 17.6% loss. In the long-term, Great Elm has performed much better nearly tripling with its 182.7% growth.
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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.