In this article, we discuss 10 monthly dividend stocks with over 5% yield. You can skip our detailed analysis of dividend stocks and their outlook for 2022, and go directly to read 5 Monthly Dividend Stocks with Over 5% Yield.
Over the years, reinvesting dividends has produced tremendous returns. From 1993 to 2018, the S&P 500’s annual average return including dividend reinvestment stood at 9.7%, compared with a 7.5% return excluding dividends, as reported by Schroders.
Dividend stocks saw a difficult time during the pandemic when some of the major dividend-paying companies were forced to trim their payouts in the face of financial instability. However, after the pandemic, many companies have returned to their healthy state, awarding shareholders solid dividends and stock buybacks. According to Goldman Sachs, the value of buybacks among the S&P 500 is expected to reach $1 trillion in 2022, up 12% from 2021.
Since the beginning of 2022, global financial markets suffered their worst, with the US S&P 500 concluding its worst first half since 1970. As we enter the second half of the year, analysts expect a further decline in the stock market, with over 40% of them considering inflation as the biggest external threat to their businesses and expecting the situation to persist for the rest of the year. However, investors seek to survive the situation through dividend income, as 42% of the analysts surveyed by CNBC believed that it’s time to invest in high-paying dividend companies, while only 3% maintained an interest in smaller high-growth tech stocks. This is further supported by the returns of iShares Core High Dividend ETF, which is up 0.26% year-to-date, compared with an 18.3% decline of the broader market during the same time, as of the close of July 8.
Over the years, investors have widely taken notice of major dividend stocks, such as Johnson & Johnson (NYSE:JNJ), The Coca-Cola Company (NYSE:KO), and Merck & Co., Inc. (NYSE:MRK). These companies hold long track records of consistent dividend growth, with solid balance sheets. However, in this article, we will explore monthly dividend stock with over 5% yield.
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Our Methodology:
For this article, we picked 10 dividend stocks with over 5% yield, as of July 8.
10 Monthly Dividend Stocks with Over 5% Yield
10. LTC Properties, Inc. (NYSE:LTC)
Dividend Yield as of July 8: 5.96%
LTC Properties, Inc. (NYSE:LTC) is a California-based real estate investment trust company that invests in healthcare and senior housing facilities.
LTC Properties, Inc. (NYSE:LTC) started paying quarterly dividends as soon as it was incorporated in 1992. Since 2005, it has paid uninterrupted monthly dividends to shareholders, making it one of the best monthly dividend stocks. With improving revenue consecutively in the last two quarters, LTC Properties, Inc. (NYSE:LTC) is expected to improve its payout ratio in the upcoming quarters. The stock’s dividend yield came in at 5.96%, as of July 8.
In June, BMO Capital upgraded LTC Properties, Inc. (NYSE:LTC) to Buy while lifting its price target to $40. The firm appreciated moderating agency costs and the company’s improving financials.
As per Insider Monkey’s Q1 2022 database, 7 hedge funds owned stakes in LTC Properties, Inc. (NYSE:LTC), down from 8 a quarter earlier. The collective value of these stakes stood at $16.1 million, compared with $7.2 million worth of stakes owned by hedge funds in Q4 2021.
In addition to Johnson & Johnson (NYSE:JNJ), The Coca-Cola Company (NYSE:KO), and Merck & Co., Inc. (NYSE:MRK), LTC Properties, Inc. (NYSE:LTC) is also one of the prominent dividend stocks to consider.
9. EPR Properties (NYSE:EPR)
Dividend Yield as of July 8: 6.76%
EPR Properties (NYSE:EPR) is an American real estate investment trust company that mainly invests in entertainment properties. The stock has rebounded nicely in 2022, gaining 1.92% in the last six months, as of the close of July 8.
EPR Properties (NYSE:EPR) froze its dividends in 2020 due to the pandemic and reinstated monthly payouts a year later. On June 28, the company announced a monthly dividend of $0.275 per share, raising it by 10% in March. In the first quarter of 2022, it paid nearly $27 million in dividends, up from $25 million during the same period last year. Though the company’s payout ratio is a little unstable at 76%, it has allocated between $500 million to $700 million for shareholder returns for FY22, signaling further dividend growth. The stock’s dividend yield was recorded at 6.76% on July 8.
Janney Montgomery Scott upgraded EPR Properties (NYSE:EPR) in July to Buy, from Neutral, highlighting the company’s revenue growth over the years.
At the end of Q1 2022, 25 hedge funds tracked by Insider Monkey had investments in EPR Properties (NYSE:EPR), worth $225.5 million. Among these hedge funds, Millennium Management was the company’s leading shareholder in Q1.
8. PennantPark Floating Rate Capital Ltd. (NYSE:PFLT)
Dividend Yield as of July 8: 9.46%
PennantPark Floating Rate Capital Ltd. (NYSE:PFLT) is a US-based externally-managed investment company that invests in middle-market companies.
On July 5, PennantPark Floating Rate Capital Ltd. (NYSE:PFLT) announced a monthly dividend of $0.095 per share, in line with its previous dividend. The company has not raised its dividend for more than five years. However, monthly payouts have been stable for the past 10 years consistently. In Q1 2022, it paid nearly $4 million in dividends, compared with $2.27 million of payments made during the same period last year. Moreover, its payout ratio has also improved from 242.5% in 2020 to 110.6% in 2022. The stock’s dividend yield was recorded at 9.46% on July 8.
According to Insider Monkey’s Q1 data, 7 hedge funds held positions in PennantPark Floating Rate Capital Ltd. (NYSE:PFLT), up from 3 a quarter earlier. The combined value of the stakes owned by those funds stood at $12.6 million, compared with $5 million worth of stakes in Q4 2021. Two Sigma Advisors was the company’s largest shareholder in Q1.
7. Dynex Capital, Inc. (NYSE:DX)
Dividend Yield as of July 8: 9.69%
Dynex Capital, Inc. (NYSE:DX) is a Virginia-based real estate investment trust company that invests in mortgage-based securities on a leveraged basis.
Dynex Capital, Inc. (NYSE:DX) has been making consecutive dividend payments for the past 13 years and hasn’t raised its dividend during this period. The company’s current monthly payout stands at $0.13 per share, with a yield of 9.69%, as of July 8. In Q1 2022, Dynex Capital, Inc. (NYSE:DX)’s payout ratio stood at 82.9%, which is normal for the mREIT sector. However, if the earnings start to decline in the upcoming quarters, the payout ratio could exceed the 100% mark by the start of 2023, which doesn’t bode well for the stock.
In June, Keefe Bruyette upgraded Dynex Capital, Inc. (NYSE:DX) to Outperform, with an $18.75 price target, up from $17, presenting a positive outlook on mortgage-based securities.
As of the quarter ended March 2022, 6 hedge funds in Insider Monkey’s database owned stakes in Dynex Capital, Inc. (NYSE:DX), up from 4 a quarter earlier. These stakes hold a collective value of nearly $19 million. Among these hedge funds, Balyasny Asset Management held the largest position in the company in Q1, with stakes valued at over $11.6 million.
6. Prospect Capital Corporation (NASDAQ:PSEC)
Dividend Yield as of July 8: 9.77%
Prospect Capital Corporation (NASDAQ:PSEC) is a business development company based in New York, that makes debt and equity investments in US middle-market businesses.
Though Prospect Capital Corporation (NASDAQ:PSEC) slashed its dividends in 2015 and 2017, the company’s consistent dividend payments have been reaching shareholders since its inception in 2004. The total dividends paid to date are valued at over $3.5 billion. Prospect Capital Corporation (NASDAQ:PSEC) currently pays a monthly dividend of $0.06 per share, with a yield of 9.77%, as of the close of July 8.
At the end of Q1 2022, Two Sigma Advisors was the largest stakeholder of Prospect Capital Corporation (NASDAQ:PSEC), with shares worth over $11 million. Overall, 6 hedge funds in Insider Monkey’s database have over $18.4 million invested in the New York-based company in Q1.
Just like famous dividend stocks, such as Johnson & Johnson (NYSE:JNJ), The Coca-Cola Company (NYSE:KO), and Merck & Co., Inc. (NYSE:MRK), Prospect Capital Corporation (NASDAQ:PSEC) also offers stable income to investors.
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Disclosure. None. 10 Monthly Dividend Stocks with Over 5% Yield is originally published on Insider Monkey.
