In this article, we will be looking at 10 high yield monthly dividend stocks to buy in August. To skip our detailed analysis of these stocks and dividend investing, you can go directly to see the 5 High Yield Monthly Dividend Stocks to Buy in August.
As we progress into the latter half of 2021, a year struck by round after round of social, political, and economic uncertainty and insecurity, it is becoming very important to be smarter with where we invest. This is especially the case when dealing with dividend stocks, which, despite being heavy market contributors, are known to be more volatile than most other stocks. As such, some judgment metrics to use when considering dividend stocks to invest in that may come in handy include payout ratios, dividend yields, long-term revenue growth, volatility, and P/E ratios, among others. When considering such metrics, while one cannot fully eliminate the risk of making any investment mistakes, one can still minimize it. This is also the case if one is to pick rather more stable stocks to invest in, like Target Corporation (NYSE: TGT), Apple Inc. (NASDAQ: AAPL), McDonald’s Corporation (NYSE: MCD), and The Coca-Cola Company (NYSE: KO). But even if one is not considering standard blue-chip stocks or stocks of more well-known companies, it is still possible to be able to make wiser investment choices by keeping the above metrics in mind.
For instance, Heartland Funds has estimated in 2014 that dividend-yielding stocks with higher yields have been outperforming lower-yielding stocks when studied between the years 1928 to 2013. During the studied time period, higher-yielding stocks outperformed lower-yielding stocks by about 1.7% per year. When taking another one of the above-mentioned metrics, we see that Credit Suisse, for instance, has estimated that between 1990 and 2006, dividend stocks that had lower payout ratios also outperformed those with higher payout ratios by about 8.2% annually. The same is the case with observing the long-term revenue growth of dividend stocks, with Oppenheimer Funds, for example, having reported in 2014 that between 1972 and 2013, dividend stocks that grew their payouts outperformed those that did not do so by about 2.4% every year during the time period studied.
Similarly, the S&P Dow Jones Indices reported that between 1990 and 2011, the S&P Low Volatility Index was able to perform much better than the regular S&P 500 Index, with the outperformance rate standing at 2% annually during the studied years. Finally, when dealing with stocks’ P/E ratios, Brandes Investment Partners revealed in 2013 that those stocks that fell in the lowest decile for P/E also performed better than stocks falling in the higher decile for P/E by a whopping 9% annually between 1975 and 2010. The list of judgment metrics one can thus take into account when trying to settle on not only dividend stocks to invest in, but really any stock to invest in is thus practically inexhaustible and continuously evolving. Yet, some metrics, like the ones above, remain constant and reliable indicators of the financial health of a stock and can thus help investors pick the best stock choices for their portfolios, especially when dealing with dividend stocks.
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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 July 2021, our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). 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.
Let’s now look at the 10 high yield monthly dividend stocks to buy in August.
Our Methodology
Insider Monkey tracks the data of about 866 hedge funds, which is what we have used to pick stocks more popular amongst the hedge funds we are tracking. We have also ensured that the stocks added to our list were high-yielding dividend stocks with yields of at least 8%. The stocks also have positive analysts’ ratings and strong fundamentals, testifying to their financial strength.
High Yield Monthly Dividend Stocks to Buy in August
10. San Juan Basin Royalty Trust (NYSE: SJT)
Number of Hedge Fund Holders: 2
Dividend Yield: 8.4%
San Juan Basin Royalty Trust (NYSE: SJT) is a Texas-based express trust with a 75% net overriding royalty interest from Southland’s oil and natural gas interests in properties in northwestern New Mexico. The company ranks 10th on our list of high yield monthly dividend stocks to buy in August.
In the first quarter of 2021, San Juan Basin Royalty Trust (NYSE: SJT) had a revenue of $8.21 million, beating the previous quarter’s revenue of $2.81 million. San Juan Basin Royalty Trust (NYSE: SJT) has also gained 42.08% in the past 6 months and 91.88% year to date.
By the end of the first quarter of 2021, 2 hedge funds out of the 866 tracked by Insider Monkey held stakes in San Juan Basin Royalty Trust (NYSE: SJT) worth roughly $471,000. This is compared to 2 hedge funds in the previous quarter with a total stake value of approximately $297,000.
Like Target Corporation (NYSE: TGT), Apple Inc. (NASDAQ: AAPL), McDonald’s Corporation (NYSE: MCD), and The Coca-Cola Company (NYSE: KO), San Juan Basin Royalty Trust (NYSE: SJT) is a good stock to invest in.
9. PennantPark Floating Rate Capital Ltd. (NASDAQ: PFLT)
Number of Hedge Fund Holders: 7
Dividend Yield: 8.8%
PennantPark Floating Rate Capital Ltd. (NASDAQ: PFLT) is a provider of first-lien debt and invests in middle-market companies within the US. The company ranks 9th on our list of high yield monthly dividend stocks to buy in August.
This July, Mitchel Penn from Oppenheimer began covering shares of PennantPark Floating Rate Capital Ltd. (NASDAQ: PFLT) with a Perform rating alongside a $13 price target. Penn has also commented that PennantPark Floating Rate Capital Ltd. (NASDAQ: PFLT) has the potential to bring in a 9% ROE.
In the fiscal third quarter of 2021, PennantPark Floating Rate Capital Ltd. (NASDAQ: PFLT) had an NII of $0.27, in line with estimates. The company’s TII was $20.91 million, beating estimates by $0.11 million. PennantPark Floating Rate Capital Ltd. (NASDAQ: PFLT) has also gained 11.11% in the past 6 months and 25.24% year to date.
By the end of the first quarter of 2021, 7 hedge funds out of the 866 tracked by Insider Monkey held stakes in PennantPark Floating Rate Capital Ltd. (NASDAQ: PFLT) worth roughly $10.4 million. This is compared to 7 hedge funds in the previous quarter with a total stake value of approximately $10.9 million.
Like Target Corporation (NYSE: TGT), Apple Inc. (NASDAQ: AAPL), McDonald’s Corporation (NYSE: MCD), and The Coca-Cola Company (NYSE: KO), PennantPark Floating Rate Capital Ltd. (NASDAQ: PFLT) is a good stock to invest in.
8. Prospect Capital Corporation (NASDAQ: PSEC)
Number of Hedge Fund Holders: 7
Dividend Yield: 8.9%
Prospect Capital Corporation (NASDAQ: PSEC), a business development company focusing on the middle-market, mature, mezzanine, finance, later stage, emerging growth, leveraged buyouts, and refinancing areas, ranks 8th on our list of high yield monthly dividend stocks to buy in August. The company also operates as an investor in real estate in the multi-family residential real estate asset class.
In July, Prospect Capital Corporation (NASDAQ: PSEC) made an announcement claiming that it had successfully funded $202 million’s worth of total commitments including a $49 million first-lien senior secured floating rate term loan and a $153 million second-lien senior secured floating rate term loan. The funding is meant to uplift the financing of PGX Holdings.
In the fiscal third quarter of 2021, Prospect Capital Corporation (NASDAQ: PSEC) had an NII of $0.19, beating estimates by $0.02. The company’s TII was $159.46 million, up 3.21% year over year and beating estimates by $8.32 million. Prospect Capital Corporation (NASDAQ: PSEC) has also gained 22.02% in the past 6 months and 48.82% year to date.
By the end of the first quarter of 2021, 7 hedge funds out of the 866 tracked by Insider Monkey held stakes in Prospect Capital Corporation (NASDAQ: PSEC) worth roughly $11.6 million. This is compared to 8 hedge funds in the previous quarter with a total stake value of approximately $18.4 million.
Like Target Corporation (NYSE: TGT), Apple Inc. (NASDAQ: AAPL), McDonald’s Corporation (NYSE: MCD), and The Coca-Cola Company (NYSE: KO), Prospect Capital Corporation (NASDAQ: PSEC) is a good stock to invest in.
7. American Finance Trust, Inc. (NASDAQ: AFIN)
Number of Hedge Fund Holders: 7
Dividend Yield: 9%
American Finance Trust, Inc. (NASDAQ: AFIN), a REIT based in the US, ranks 7th on our list of high yield monthly dividend stocks to buy in August. The company’s portfolio is made up of a creditworthy tenant base and is service-retail focused.
B. Riley’s Bryan Maher holds a Buy rating on shares of American Finance Trust, Inc. (NASDAQ: AFIN). The analyst has also placed an $11 price target on the stock.
In the second quarter of 2021, American Finance Trust, Inc. (NASDAQ: AFIN) had an FFO of $0.23, in line with estimates. The company’s revenue was $81.58 million, up 8.87% year over year and beating estimates by $0.78 million. American Finance Trust, Inc. (NASDAQ: AFIN) has also gained 8.6% in the past 6 months and 14.99% year to date.
By the end of the first quarter of 2021, 7 hedge funds out of the 866 tracked by Insider Monkey held stakes in American Finance Trust, Inc. (NASDAQ: AFIN) worth roughly $11.8 million. This is compared to 8 hedge funds in the previous quarter with a total stake value of approximately $9.87 million.
Like Target Corporation (NYSE: TGT), Apple Inc. (NASDAQ: AAPL), McDonald’s Corporation (NYSE: MCD), and The Coca-Cola Company (NYSE: KO), American Finance Trust, Inc. (NASDAQ: AFIN) is a good stock to invest in.
6. Dynex Capital, Inc. (NYSE: DX)
Number of Hedge Fund Holders: 10
Dividend Yield: 9%
Dynex Capital, Inc. (NYSE: DX) is a mortgage REIT investing in mortgage-backed securities on a leveraged basis primarily in America. The company ranks 6th on our list of high yield monthly dividend stocks to buy in August.
BTIG holds a Buy rating on Dynex Capital, Inc. (NYSE: DX) shares. Additionally, in the second quarter of 2021, Dynex Capital, Inc. (NYSE: DX) had an FFO of $0.51, beating estimates by $0.04. The company’s revenue was $12.12 million, but missing estimates by $2.96 million. Dynex Capital, Inc. (NYSE: DX) has also gained 15.23% in the past year.
By the end of the first quarter of 2021, 10 hedge funds out of the 866 tracked by Insider Monkey held stakes in Dynex Capital, Inc. (NYSE: DX) worth roughly $23.7 million. This is compared to 10 hedge funds in the previous quarter with a total stake value of approximately $15.1 million.
Like Target Corporation (NYSE: TGT), Apple Inc. (NASDAQ: AAPL), McDonald’s Corporation (NYSE: MCD), and The Coca-Cola Company (NYSE: KO), Dynex Capital, Inc. (NYSE: DX) is a good stock to invest in.
Click to continue reading and see the 5 High Yield Monthly Dividend Stocks to Buy in August.
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Disclosure: None. 10 High Yield Monthly Dividend Stocks to Buy in August is originally published on Insider Monkey.
