Are you looking for Stocks Paying Monthly Dividends? Our report covers 34 companies with a dividend yield between 1% and 13.8%. We also list the sector, market capitalization, and the consecutive years of dividend increases.
Note: Liberated Stock Trader is in no way affiliated, paid by, or owns any stock in any of the companies mentioned in this report. This is an unbiased research report.
Monthly Dividend Stocks List for 2021
|Ticker||Company||Sector||Dividend Yield||Market Cap ($M)||Payout Ratio||Dividend Growth Years|
|ORC||Orchid Island Capital||Real Estate||13.80%||$480||2087.50%||0|
|ARR||ARMOUR Residential REIT||Real Estate||10.00%||$784||–||0|
|PSEC||Prospect Capital||Financial Services||9.90%||$2,807||61.00%||0|
|PFLT||PennantPark Floating Rate||Financial Services||9.60%||$458||129.60%||0|
|AGNC||AGNC Investment||Real Estate||9.00%||$8,626||–||0|
|DX||Dynex Cap||Real Estate||8.40%||$502||22.80%||0|
|MCR||MFS Charter Income||Financial Services||8.20%||$374||146.80%||–|
|GLAD||Gladstone Capital||Financial Services||8.10%||$313||265.00%||0|
|GOOD||Gladstone Commercial||Real Estate||8.10%||$680||1746.30%||1|
|BRMK||Broadmark Realty Capital||Real Estate||8.10%||$1,380||–||1|
|MMT||MFS Multimarket IT||Financial Services||8.00%||$370||–||–|
|EFC||Ellington Financial||Financial Services||7.70%||$683||–||0|
|GAIN||Gladstone Investment||Financial Services||7.10%||$391||–||10+|
|MAIN||Main Street Capital||Financial Services||6.90%||$2,365||–||0|
|BKT||Blackrock Income Trust||Financial Services||6.80%||$388||107.20%||–|
|LTC||LTC Properties||Real Estate||5.50%||$1,625||94.60%||0|
|SLG||SL Green Realty||Real Estate||5.40%||$4,621||113.00%||0|
|SJR||Shaw Communications||Communication Services||5.30%||$11,456||89.80%||0|
|OIA||Invesco Muni Income Opps||Financial Services||4.90%||$369||35.70%||–|
|AVAL||Grupo Aval Acciones||Financial Services||4.90%||$6,900||56.30%||0|
|BKN||Blackrock Investment||Financial Services||4.80%||$292||–||–|
|STAG||Stag Industrial||Real Estate||4.60%||$5,046||109.10%||9|
|O||Realty Income||Real Estate||4.60%||$22,909||243.60%||10+|
|GRP.U||Granite REIT||Real Estate||4.10%||$4,537||45.20%||6|
|ADC||Agree Realty||Real Estate||3.80%||$4,121||136.70%||8|
|LAND||Gladstone Land||Real Estate||2.90%||$445||–||6|
|GWRS||Global Water Resources||Utilities||1.70%||$493||577.90%||4|
|ITUB||Itau Unibanco Holding||Financial Services||1.20%||$45,883||46.50%||0|
|BBD||Bank Bradesco||Financial Services||1.00%||$37,741||38.70%||0|
|LANDM||Gladstone Land (Preferred)||Real Estate||1.00%||$445||–||–|
Be Careful When Buying High Dividend Stocks
It is easy to think that buying a stock with a high dividend yield is the key to making easy money. But you need to pay attention to the dividend payout ratio. We calculate the payout ratio by dividing the total dividends paid by the Net Income. A payout ratio above 100% would indicate that a company cannot continue paying dividends at this level because they are not earning enough profit to cover the dividend payment.
It is generally a good rule of thumb to go for companies with a payout ratio under 100%. The lower the payout ratio, the better.
Also, you need to pay attention to Market Capitalization; if the company is too small or does not have enough liquidity, it may be difficult to sell the stock in the future.
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What Stocks Pay Monthly Dividends
Usually, investors searching for dividend stocks follow an “income strategy,” which means they seek to generate a steady income from their investments rather than a big capital gain through appreciation of the stock price.
WHEN you get paid in an income investment strategy is almost as important as how much you get paid. Income strategies are usually about creating a cash stream to face specific financial targets. This implies that each investor must build his own portfolio in accordance with their timely needs in a way that dividends are paid WHEN needed.
However, some investors have other goals when buying dividend-paying stocks and are actually more interested in reinvesting the dividends received. Even then, dividend frequency plays a big role. The purpose of reinvesting is to take advantage of compounding.
In other words, they build a larger position which yields a larger dividend that is reinvested again in making the position even larger. This cycle can grow your returns exponentially, and that growth is as fast as the dividends are reinvested.
Does this mean dividends paid more frequently are better than those paid less frequently?
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Why Do Companies Pay Monthly Dividends?
From the company’s perspective, it seems unfavorable to pay monthly dividends, so why do some companies choose to pay so frequently?
If a dividend in itself is a commitment, a monthly dividend is an even bigger commitment, one that attracts investors. Nowadays, companies and funds are more aware than ever of investors’ preferences and do their best to meet them.
Also, some businesses like Real Estate Investment Trusts (REITs) receive their income on a monthly basis (e.g., rents), so it makes sense they also distribute it monthly.
Advantages & Disadvantages of Monthly Dividends
The increased frequency of monthly dividends is desirable for several reasons:
- Easier to Manage
- Faster Compounding with Monthly Payouts
- Less Volatility around Ex-dividend Date
- Incremented expenses
- Financial Constraints
Easier to Manage
As previously mentioned, income strategies can require some management to make dividend payments meet specific expenses. It can be difficult to meet recurring expenses with a quarterly or biannual dividend since many of those amounts are due on a shorter period basis.
Of course, income investors can build a portfolio that pays dividends every month by choosing stocks that reward shareholders in alternate months. Nevertheless, that is more difficult and can be more expensive (transaction costs) than choosing monthly dividend-paying investments.
Faster Compounding with Monthly Payouts
Whether to meet specific financial needs or to take advantage of the compounding, monthly payments can still have the upper hand against less-frequent payments. The more frequent the dividend, the faster it is reinvested; this means your monthly income increases faster. Obviously, the difference is small because each reinvestment amounts to 1/12 of the yearly dividend, but over a long period (decades), it turns into a sizeable amount.
Less volatility around the ex-dividend date
There is a date after which investors that buy the stock aren’t entitled to receive the next dividend; instead, they have to wait for the following payment. That date is called the “ex-dividend date.”
Imagine a company that pays an annual dividend of 5%. It’s easy to understand there will be many people trying to get the stock right before the ex-dividend date in hopes of getting 5% out of their investment without having to wait the whole year and being exposed to share price volatility. In the same way, there will be a lot of people closing their position after they get their payment.
The larger the dividend yield, the larger the price swings around the ex-dividend date. When the dividend is spread throughout the year, each payment is smaller, translating into less volatility around these dates.
An income investment strategy isn’t intended to be a short-term strategy. Still, every once in a while, it’s healthy to reevaluate the portfolio, close some positions, and open new ones.
When the time comes, it can be frustrating having to wait for a dividend that’s distributed once or twice a year. Picture the situation where an investor sells the stock one or two months before the ex-dividend date, and the dividend is distributed once a year. This investor might have held the stock for ten or eleven months, and he still doesn’t get a cent in dividends. This will happen to a lesser degree to more frequent dividend payments.
However attractive, monthly dividends also imply some inconveniences:
Some companies mention increased costs for processing dividend payments which makes it more attractive for companies to pay dividends less often. If that’s the case, monthly payments can cost roughly 12 times as much as processing a single annual dividend. Could stocks have a higher dividend yield if they paid annual dividends?
To pay monthly dividends, a company needs to have a very disciplined financial execution. If its cash flow is exposed to some seasonality, the company may require external funds to pay dividends which could otherwise fund itself, provided it had some more time.
The business that makes monthly dividend-payments on stocks needs to be very stable – and even then, most companies are paying quarterly dividends – it can be a challenge to find the right investments, especially if you want to diversify.
[Related Article: The Best Stock Screeners To Find Dividend & Value Stocks]
Highest Paying Monthly Dividend Stocks 2021
|Ticker||Company||Sector||Dividend Yield||Market Cap ($M)||Consecutive Div. Growth Years|
|ORC||Orchid Island Capital||Real Estate||13.80%||$480||0|
|ARR||ARMOUR Residential REIT||Real Estate||10.00%||$784||0|
|PSEC||Prospect Capital||Financial Services||9.90%||$2,807||0|
|PFLT||PennantPark Floating Rate||Financial Services||9.60%||$458||0|
|AGNC||AGNC Investment||Real Estate||9.00%||$8,626||0|
|DX||Dynex Cap||Real Estate||8.40%||$502||0|
|MCR||MFS Charter Income||Financial Services||8.20%||$374||–|
|GLAD||Gladstone Capital||Financial Services||8.10%||$313||0|
|GOOD||Gladstone Commercial||Real Estate||8.10%||$680||1|
|BRMK||Broadmark Realty Capital||Real Estate||8.10%||$1,380||1|
|MMT||MFS Multimarket IT||Financial Services||8.00%||$370||–|
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Note: We Hold No Positions in any of these stocks, nor do we have any business or personal relationship with any of the companies mentioned – this is a completely unbiased report for educational purposes and is not a recommendation to buy or sell any stock referenced.