10 Best Monthly Dividend Stocks in 2021

Published on April 14, 2021 at 10:33 am by Usman Kabir in Lists, News

In this article we will take a look at the 10 best monthly dividend stocks for 2021. You can skip our detailed analysis of these dividend stocks and go directly to the 5 Best Monthly Dividend Stocks in 2021.

The COVID-19 pandemic led to strict lockdowns across the world last year and business remained shuttered for months in some countries. As a result, people found themselves without jobs as companies that had not yet embraced the digital economy struggled to stay afloat. For many, the pandemic was a rude awakening. The families who had not diversified their income were perhaps the hardest hit. Washington-based research group Brookings estimates that real monthly income for families declined by a record 10% in April 2020.

As the vaccine rollout in the first quarter of 2020 allowed for the reopening of the economy, the coronavirus relief benefits in many countries expired. As people went back to their jobs uncertain of the future, many wanted to prepare for future scenarios where regular income might take a beating. For those unsure about how to proceed forward, monthly dividend stocks might be the answer. Forbes reports that as growth stocks reach their peak, having reinvested dividends to improve value, the market might swing back towards high-dividend value stocks.

Why Should You Buy Monthly Dividend Stocks?

This means that investing in companies paying high monthly dividends is a smart way of ensuring a steady, risk-free flow of income. Indeed, data suggests that dividend stocks have outperformed non-dividend paying stocks over longer periods. Investments in dividend stocks also show that the top companies do find a way to increase their dividend over time, making them more resilient to market fluctuations. Wharton academic Jeremy Siegel, in a book, says roughly 97% of total real accumulation from stocks comes from reinvesting dividends.

However, there is a caveat. Only a few stocks on the market offer monthly dividends. Of the more than 20,000 firms on the market, only a few hundred pay monthly dividends. The companies offering these payments also tend to be concentrated in the real estate trust, business development, and closed-end funds sector. They have high yields but question marks on stability and growth over the course of time. However, since monthly dividends often align with bill payments, mortgages and other charges, they are a top investment.

Before investing, it is prudent to look into the company history for payout consistency, dividend growth, and a good business reputation. Spending on shares of firms that may offer higher monthly dividends for the time being but have a bad history will certainly not bode well for someone looking to make a steady income on the side. The financial volatility of markets has made it even harder to separate the good from the bad, and this change is affecting individual investors as well as large investment firms.

In fact, the entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26th 2021 our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.

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With this context in mind, here is a look at the top 10 best monthly dividend stocks.

Best Monthly Dividend Stocks in 2021

10. Cross Timbers Royalty Trust (NYSE: CRT)

Cross Timbers Royalty Trust (NYSE: CRT) is a Dallas-based express trust whose net profit interests are its primary asset. The net profits interests are made from producing royalty and overriding royalty interest properties in Texas, Oklahoma and New Mexico, and 11.11% non-participating royalty interests in non-producing properties located primarily in Texas and Oklahoma. The market cap of the trust is over $53 million.

Founded in 1991, the trust posted a revenue of more than $5 million more than twelve months ago. It has a dividend yield of more than 5% and an annual dividend of more than $0.45 per share. The next payments to its shareholders are expected later this week. Cross Timbers Royalty Trust is placed tenth on our list of 10 best monthly dividend stocks for 2021. In December, the trust increased its dividend by 20%.

9. Prospect Capital Corporation (NASDAQ: PSEC)

Prospect Capital Corporation (NASDAQ: PSEC) is a New York-based financial services company that aims to generate both current income and long-term capital appreciation through debt and equity investments in middle tier companies. It has a market cap of more $3 billion and posted more than $620 million in revenue in June 2020. It has a dividend yield of 9% and it pays out all of its earnings as dividend. It has an annual dividend of $0.72 per share. Prospect Capital is placed ninth on our list of best monthly dividend stocks for 2021.

At the end of the fourth quarter of 2020, 8 hedge funds out of 887 in the Insider Monkey database held stakes in General Electric, up from 7 out of 817 in Q3 2020. The total value of the shares held by these hedge funds in Q4 2020 was over $18 million, up from $13 million in the preceding quarter. Out of the hedge funds being tracked by Insider Monkey, Arrowstreet Capital held the most shares – 1,684,176 – worth more than $9 million. McKinley Capital Management was 2nd with 564,423 shares worth almost $3 million.

8. Pembina Pipeline Corporation (NYSE: PBA)

Pembina Pipeline Corporation (NYSE: PBA) is a Calgary-based transportation and service provider. The firm owns pipelines that transport hydrocarbons and natural gas products produced in Canada. It has a market cap of more than $16 billion and posted more than $4.7 billion in revenue in December 2020. It has a dividend yield of 6.81%. The dividend yield of the firm is growing at more than 5% per year. Pembina Pipeline Co ranks eighth on our list of best monthly dividend stocks to buy for 2021.

At the end of the fourth quarter of 2020, 13 hedge funds out of 887 in the Insider Monkey database held stakes in General Electric, up from 12 out of 817 in Q3 2020. The total value of the shares held by these hedge funds in Q4 2020 was over $61 million, up from $56 million in the preceding quarter. Out of the hedge funds being tracked by Insider Monkey, Holocene Advisors held the most shares – 994,569 – worth more than $23 million. Millennium Management was 2nd with 886,686 shares worth almost $20 million.

7. Agree Realty Corporation (NYSE: ADC)

Agree Realty Corporation (NYSE: ADC) is a Michigan-based real estate investment trust engaged in the ownership, acquisition, development and management of retail properties. It has a market cap of more than $4.3 billion and posted more than $248 million in revenue in December 2020. It has a dividend yield of 3.67% and the firm is increasing its dividend at a rate 5.9% per year. The firm has a payout ratio of 80.5%. It ranks seventh on our list of best monthly dividend stocks to buy for 2021.

At the end of the fourth quarter of 2020, 16 hedge funds out of 887 in the Insider Monkey database held stakes in General Electric, the same as in Q3 2020. The total value of the shares held by these hedge funds in Q4 2020 was over $240 million, down from $250 million in the preceding quarter. Out of the hedge funds being tracked by Insider Monkey, Zimmer Partners held the most shares – 1,552,091 – worth more than $103 million. Citadel Investment Group was 2nd with 656,321 shares worth almost $44 million.

6. Dynex Capital, Inc. (NYSE: DX)

Dynex Capital, Inc. (NYSE: DX) is a Virginia-based real estate investment trust involved in residential and commercial mortgage securities on a leveraged basis. The firm aims to provide risk-adjusted returns to shareholders. It has a market cap of over $580 million and posted more than $190 million in revenue in December 2020. The company has a four-year average dividend yield of 11.66%. It has posted double-digit yields for many months over the past few years. Dynex Capital ranks sixth on our list of 10 best monthly dividend stocks to buy for 2021.

At the end of the fourth quarter of 2020, 10 hedge funds out of 887 in the Insider Monkey database held stakes in General Electric, up from 8 out of 817 in Q3 2020. The total value of the shares held by these hedge funds in Q4 2020 was over $15 million, up from $7.7 million in the preceding quarter. Out of the hedge funds being tracked by Insider Monkey, Renaissance Technologies held the most shares – 216,945 – worth more than $3.8 million. DE Shaw was 2nd with 163,369 shares worth almost $2.9 million.

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