In this article, we will be looking at the 10 best monthly dividend stocks with high yields. You can skip our detailed analysis of dividend investing, and go directly to the 5 Best Monthly Dividend Stocks with High Yields.
According to a Congressional Research Service report released and updated this June, the labor market in the US has been greatly impacted by the coronavirus pandemic, with the unemployment rate reaching 14.8% in April 2020. This figure was the highest of its kind seen since 1948, and even until May 2021, the unemployment rate in the US remained higher, at 5.8%, than it had been in February 2020 (3.5%). These statistics are used to merely drive an already well-known fact home: ever since the pandemic hit the US, people have been out of jobs, with most households being left without a stable source of income. And that is where monthly dividend stocks can come into play.
For those on the lookout for a steady and passive income stream that can bail them out during times of financial instability and volatility, as is the case during this pandemic, monthly dividend stocks, or rather, any dividend stocks can be excellent investment opportunities. In fact, a Reuters report from this July has indicated that more and more investors are beginning to gravitate towards dividend stocks in light of inflation concerns and a belief that the Treasury’s yields may not be too inviting in the second half of 2021.
Bob Leininger, a portfolio manager at Gabelli Funds, has reportedly commented that the market is going to start focusing on companies that will foreseeable increase their payout ratios and current returns. Goldman Sachs analysts have also estimated that out of the 57 companies that had either cut or suspended dividends last year, about 22 have resumed or raised their yields, while about 19 other companies are expected to join suit by the end of 2021. The buy-back and dividend payouts from financial companies are expected to be worth more than $130 billion this year as well, and all the above is indicating that companies are rising to meet investor demand for dividend payouts.
In light of the above, dividend stocks and ETFs like the ProShares S&P Dividend Aristocrats ETF have been rising, with this ETF, in particular, being up over 14.3% so far in 2021. Goldman Sachs has also estimated that the S&P 500’s dividend payouts will rise by about 6% in 2021 and 2022. With such developments dividend stocks like The Procter & Gamble Company (NYSE: PG), The Coca-Cola Company (NYSE: KO), PepsiCo, Inc. (NASDAQ: PEP), and Johnson & Johnson (NYSE: JNJ) may become just the right investment option for income investors.
Investing is becoming difficult by the day, even for the smart money. 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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Without further ado, let’s look at the 10 best monthly dividend stocks with high yields. All these stocks pay monthly dividends. We selected these stocks based on dividend safety, positive analyst ratings and hedge fund sentiment.
Best Monthly Dividend Stocks with High Yields
10. Gladstone Investment Corporation (NASDAQ: GAIN)
Number of Hedge Fund Holders: 4
Dividend Yield: 5.81%
Gladstone Investment Corporation (NASDAQ: GAIN) is a financials company specializing in the lower middle market, mature stage, buyouts, refinancing existing debt, and other similar areas. It ranks 10th on our list of the best monthly dividend stocks with high yields.
This April, Oppenheimer began coverage of Gladstone Investment Corporation (NASDAQ: GAIN) shares with a Perform rating.
In the fiscal fourth quarter of 2021, Gladstone Investment Corporation (NASDAQ: GAIN) had an NII of $0.62, beating estimates by $0.44. The company’s TII was $16.71 million, up 39.44% year over year and beating estimates by $2.95 million. Gladstone Investment Corporation (NASDAQ: GAIN) has also gained 34.86% in the past 6 months and 43.13% year to date.
By the end of the first quarter of 2021, 4 hedge funds out of the 866 tracked by Insider Monkey held stakes in Gladstone Investment Corporation (NASDAQ: GAIN) worth roughly $1.92 million. This is compared to 5 hedge funds in the previous quarter with a total stake value of approximately $2.508 million.
Like The Procter & Gamble Company (NYSE: PG), The Coca-Cola Company (NYSE: KO), PepsiCo, Inc. (NASDAQ: PEP), and Johnson & Johnson (NYSE: JNJ), Gladstone Investment Corporation (NASDAQ: GAIN) is a good dividend stock to invest in.
9. Main Street Capital Corporation (NYSE: MAIN)
Number of Hedge Fund Holders: 10
Dividend Yield: 5.95%
Main Street Capital Corporation (NYSE: MAIN) is a company operating in the financials sector as a private equity firm specializing in equity capital to lower middle market companies. It ranks 9th on our list of the best monthly dividend stocks with high yields.
This March, Raymond James upgraded Main Street Capital Corporation (NYSE: MAIN) shares to Outperform from Market Perform with a $41 price target. Analyst Robert Dodd commented that he foresees an upside on the shares because of a range of factors, like its growing ROE profile from growing dividend income.
In the first quarter of 2021, Main Street Capital Corporation (NYSE: MAIN) had an NII of $0.58, beating estimates by $0.03. The company’s TII was $62.81 million, up 11.86% year over year and beating estimates by $4.04 million. Main Street Capital Corporation (NYSE: MAIN) has also gained 26.48% in the past 6 months and 31.80% year to date.
By the end of the first quarter of 2021, 10 hedge funds out of the 866 tracked by Insider Monkey held stakes in Main Street Capital Corporation (NYSE: MAIN) worth roughly $33.9 million. This is compared to 7 hedge funds in the previous quarter with a total stake value of approximately $42.7 million.
Like The Procter & Gamble Company (NYSE: PG), The Coca-Cola Company (NYSE: KO), PepsiCo, Inc. (NASDAQ: PEP), and Johnson & Johnson (NYSE: JNJ), Main Street Capital Corporation (NYSE: MAIN) is a good dividend stock to invest in.
8. Pembina Pipeline Corporation (NYSE: PBA)
Number of Hedge Fund Holders: 15
Dividend Yield: 6.16%
Pembina Pipeline Corporation (NYSE: PBA) is an energy sector company providing transportation and midstream services for the energy industry. It ranks 8th on our list of the best monthly dividend stocks with high yields.
This June, CIBC upgraded Pembina Pipeline Corporation (NYSE: PBA) shares from Neutral to Outperform with a price target of approximately $37.3. Analyst Robert Catellier commented that the threat posed by the pandemic has subsided enough for him to believe that Pembina Pipeline Corporation (NYSE: PBA) will be about to successfully close the IPL acquisition.
In the first quarter of 2021, Pembina Pipeline Corporation (NYSE: PBA) had an EPS of $0.44, missing estimates by $0.06, while the company’s revenue was $1.68 billion, up 40.68% year over year and beating estimates by $321.64 million. Pembina Pipeline Corporation (NYSE: PBA) has also gained about 10% in the past 6 months and 30.08% year to date.
By the end of the first quarter of 2021, 15 hedge funds out of the 866 tracked by Insider Monkey held stakes in Pembina Pipeline Corporation (NYSE: PBA) worth roughly $74.8 million. This is compared to 13 hedge funds in the previous quarter with a total stake value of approximately $61.6 million.
Like The Procter & Gamble Company (NYSE: PG), The Coca-Cola Company (NYSE: KO), PepsiCo, Inc. (NASDAQ: PEP), and Johnson & Johnson (NYSE: JNJ), Pembina Pipeline Corporation (NYSE: PBA) is a good dividend stock to invest in.
7. Cross Timbers Royalty Trust (NYSE: CRT)
Number of Hedge Fund Holders: N/A
Dividend Yield: 6.37%
Cross Timbers Royalty Trust (NYSE: CRT) is an express trust operating in the US. The company holds about 90% of the net profits interests in several producing and nonproducing royalty and overriding royalty interest properties in Texas, Oklahoma, and New Mexico, and it ranks 7th on our list of the best monthly dividend stocks with high yields.
In the first quarter of 2021, Cross Timbers Royalty Trust (NYSE: CRT) had revenue of $1.36 million, surpassing the previous quarter’s $1.20 million revenue. The stock has also gained 38.88% in the past 6 months and 43.67% year to date.
Like The Procter & Gamble Company (NYSE: PG), The Coca-Cola Company (NYSE: KO), PepsiCo, Inc. (NASDAQ: PEP), and Johnson & Johnson (NYSE: JNJ), Cross Timbers Royalty Trust (NYSE: CRT) is a good dividend stock to invest in.
6. Horizon Technology Finance Corporation (NASDAQ: HRZN)
Number of Hedge Fund Holders: N/A
Dividend Yield: 6.9%
Horizon Technology Finance Corporation (NASDAQ: HRZN) is a business development company operating in the asset management and custody banks industry. It specializes in lending and investing in development-stage investments and ranks 6th on our list of the best monthly dividend stocks with high yields.
In April, B. Riley raised its price target on Horizon Technology Finance Corporation (NASDAQ: HRZN) shares from $11.50 to $14.50, keeping a Neutral rating on the stock. Analyst Sarkis Sherbetchyan commented that the increased price target came in light of the company’s Q1 results, which exceeded expectations.
In the first quarter of 2021, Horizon Technology Finance Corporation (NASDAQ: HRZN) had an NII of $0.31, beating estimates by $0.03. The company’s TII was $13.21 million, up 30.66% year over year and beating estimates by $1.46 million. Horizon Technology Finance Corporation (NASDAQ: HRZN) has also gained about 30.90% in the past 6 months and 34.20% year to date.
Like The Procter & Gamble Company (NYSE: PG), The Coca-Cola Company (NYSE: KO), PepsiCo, Inc. (NASDAQ: PEP), and Johnson & Johnson (NYSE: JNJ), Horizon Technology Finance Corporation (NASDAQ: HRZN) is a good dividend stock to invest in.
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Disclosure: None. 10 Best Monthly Dividend Stocks with High Yields is originally published on Insider Monkey.
