Best Monthly Dividend Stocks For 2021

Are you looking for Stocks Paying Monthly Dividends? Our Listing Cover 34 Stocks Paying the Highest Monthly Dividends, Plus Dividend Payout Ratio

Vasco Ferreira

August 26, 2021

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
PBA	Pembina Pipeline	Energy	7.30%	$19,088	154.70%	9
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%	–
SBR	Sabine Royalty	Energy	5.80%	$496	99.50%	0
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+
WSR	Whitestone	Real Estate	4.60%	$401	156.50%	0
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
ERF	Enerplus	Energy	1.90%	$1,397	–	0
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?

Related Articles: Finding Great Stocks With Stock Rover

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
Fairness
Incremented expenses
Financial Constraints
Diversification

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.

Fairness

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:

Incremented expenses

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?

Financial constraints

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.

Diversification

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.

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	–