In this article, we discuss 10 monthly dividend stocks with over 4% yield. You can skip our detailed analysis of dividend stocks and their returns in the past, and go directly to read 5 Monthly Dividend Stocks with Over 4% Yield.
Dividend stocks are outperforming this year as high-interest rates and inflation pull down the market. Dividend companies that make regular distributions to shareholders and have raised their payouts for years are valuable in times of financial instability. These companies tend to have stable cash flow generation and solid balance sheets to support shareholder returns. Some of the best dividend stocks in this context are The Coca-Cola Company (NYSE:KO), Johnson & Johnson (NYSE:JNJ), and The Procter & Gamble Company (NYSE:PG).
Over the years, dividend stocks have delivered long-term returns to shareholders during inflationary periods. According to a report published by BMO Capital Markets, dividend-paying stocks’ annual average return stood at 7.8% from 1998 to 2013, compared with a 2.4% annual average return of non-dividend stocks. During this period, the S&P 500 returned 4.3%, significantly underperforming the dividend-paying securities. Another report by T. Rowe Price showed that dividend growers dominated during the down markets. From December 1985 to December 2020, dividend growers fell by 12.1% on average, compared to a 27.9% drop in non-dividend payers. The report further mentioned that with moderate returns of the broader markets, dividend companies offering yields between 2% to 3% are favorable investment options.
Robert D. Arnott, the founder of Research Affiliates, talked about the significant representation of dividends in overall long-term market returns in his interview with Danske Invest. He mentioned that the average annual return from equities was 7.9% from 1802 to 2002, 5% of which was from dividends. The result shows that dividends were the main source of returns during this period. The report also mentioned that stocks with high dividend yields offer lower volatility and stronger downside protection during volatile times, compared with non-dividend paying stocks.
Photo by Sharon McCutcheon on Unsplash
Our Methodology:
For this list, we selected monthly dividend stocks with yields over 4%. The stocks are analyzed through their dividend policies, balance sheets, and overall financial health. They are ranked from the lowest yield to the highest, as recorded on October 7.
10 Monthly Dividend Stocks with Over 4% Yield
10. Phillips Edison & Company, Inc. (NASDAQ:PECO)
Dividend Yield as of October 7: 4.00%
Phillips Edison & Company, Inc. (NASDAQ:PECO) is an American real estate investment trust company that owns and develops shopping centers throughout the US. The company has multiple offices throughout the country. It reported strong Q2 results and an overall stable cash position. The company’s revenue for the quarter stood at $142.5 million, up 7.1% from the same period last year. Its operating cash flow came in at $82.2 million, compared with $60.2 million in the previous quarter. The company generated $58 million in free cash flow, up from $41.6 million a quarter earlier.
On September 6, Phillips Edison & Company, Inc. (NASDAQ:PECO) declared a 3.7% hike in its monthly dividend to $0.0933 per share. As of October 7, the stock’s dividend yield came in at 4.00%. The company started paying dividends in 2021 and has raised its payouts since then, which makes it one of the best highest-paying monthly dividend stocks on our list.
In July, Morgan Stanley maintained its Equal Weight rating on Phillips Edison & Company, Inc. (NASDAQ:PECO) with a $31 price target. The firm expressed concerns for the REITs due to the current economic environment.
At the end of Q2 2022, 11 hedge funds tracked by Insider Monkey owned stakes in Phillips Edison & Company, Inc. (NASDAQ:PECO), down from 15 in the previous quarter. The collective value of these stakes is over $52.8 million. Holocene Advisors was the company’s leading stakeholder in Q2.
In addition to famous dividend stocks like The Coca-Cola Company (NYSE:KO), Johnson & Johnson (NYSE:JNJ), and The Procter & Gamble Company (NYSE:PG), Phillips Edison & Company, Inc. (NASDAQ:PECO) can be a good addition to dividend portfolios due to its monthly payouts.
9. Agree Realty Corporation (NYSE:ADC)
Dividend Yield as of October 7: 4.37%
Agree Realty Corporation (NYSE:ADC) is an American real estate investment trust that specializes in the acquisition and development of properties net leased to retailers in the country. The company was appreciated by Street analysts after its Q2 2022 results. In August, both Truist and RBC Capital raised their price targets on the stock to $84 and $83, respectively.
Agree Realty Corporation (NYSE:ADC) has been raising its dividends consistently for the past 11 years, coming through as one of the best highest-paying monthly dividend stocks. The company pays a monthly dividend of $0.234 per share, with a dividend yield of 4.37%, as of October 7. The dividend payments represent a payout ratio of approximately 72% of its FFO.
In Q2 2022, Agree Realty Corporation (NYSE:ADC) reported revenue of $104.8 million, which showed a 27.05% year-over-year growth. At the end of June, the company’s AFFO stood at nearly $149 million, compared with $110 million during the same period last year. It ended the quarter with $26.2 million available in cash and cash equivalents.
At the end of June 2022, 19 hedge funds tracked by Insider Monkey reported owning stakes in Agree Realty Corporation (NYSE:ADC), valued at over $110 million. In comparison, 21 hedge funds owned stakes in the company in the previous quarter, with a total value of over $141.5 million.
8. Whitecap Resources Inc. (TSX:WCP.TO)
Dividend Yield as of October 7: 4.42%
Whitecap Resources Inc. (TSX:WCP.TO) is a Canadian crude oil industry company that is mainly engaged in the acquisition of petroleum and natural gas properties and assets.
Whitecap Resources Inc. (TSX:WCP.TO) has raised its dividends at a CAGR of 4.56% in the last five years. It currently pays a monthly dividend of C$0.0367 per share for a dividend yield of 4.42%, as of October 7.
In Q2 2022, Whitecap Resources Inc. (TSX:WCP.TO) reported petroleum and natural gas revenues of C$1.2 billion, up from C$613.5 million during the same period last year. The company’s operating cash flow stood at $676.7 million, compared with $390.5 million in the previous quarter. Its free cash flow for the quarter came in at $582.4 million, up from $178.8 million a quarter earlier. The company paid $55.6 million in dividends during the quarter, which shows that its free cash flow is stable for shareholder returns.
7. Exchange Income Corporation (TSX:EIF.TO)
Dividend Yield as of October 7: 5.59%
Exchange Income Corporation (TSX:EIF.TO) is a Canada-based company that specializes in aviation services and equipment and also manufactures related products. In September, TD Securities initiated its coverage on the stock with a Buy rating and a C$66 price target, highlighting the company’s gross profits and its overall earnings.
In Q2 2022, Exchange Income Corporation (TSX:EIF.TO) reported revenue of $529 million, up 64.3% from the same period last year. The company’s free cash flow came in at $89 million, up 56% from the prior-year quarter. It also improved its payout ratio from 58% to 56% during the quarter.
Exchange Income Corporation (TSX:EIF.TO) is one of the best highest-paying monthly dividend stocks on our list as the company has been raising its dividends consistently for the past six years. It currently pays a monthly dividend of C$0.21 per share and has a dividend yield of 5.59%, as of October 7.
6. TransAlta Renewables Inc. (TSX:RNW.TO)
Dividend Yield as of October 7: 6.56%
TransAlta Renewables Inc. (TSX:RNW.TO) is a hydroelectric power generation company based in Canada. The company is one of the largest generators of wind power in the country and also the largest producer of hydropower. The company has been paying consistent dividends to shareholders since 2014. Currently, it pays a monthly dividend of $0.0783 per share and has a dividend yield of 6.56%, as recorded on October 7.
In Q2 2022, TransAlta Renewables Inc. (TSX:RNW.TO) reported revenue of $139 million, which showed a 51.1% growth from the same period last year. The company generated $87 million in free cash flow, up 23% from the prior-year quarter. Its cash available for distributions (CFD) came in at $49 million, showing a 23% year-over-year growth. The company’s CFD was enough to fulfill its shareholder return during the quarter.
In August, National Bank raised its price target on TransAlta Renewables Inc. (TSX:RNW.TO) to C$19 with a Sector Perform rating on the shares, appreciating the growth in the company’s revenue over the years. This monthly dividend stock can be a valuable addition to dividend portfolios alongside The Coca-Cola Company (NYSE:KO), Johnson & Johnson (NYSE:JNJ), and The Procter & Gamble Company (NYSE:PG).
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Disclosure. None. 10 Monthly Dividend Stocks with Over 4% Yield is originally published on Insider Monkey.