In this article, we will analyze the list of best dividend stocks that offer monthly dividends.
Over the years, dividend stocks have consistently demonstrated resilience in challenging market conditions. While the recent focus on AI might suggest otherwise, the long-term attractiveness of these stocks has increased. Income investors have taken note of this trend, which is reflected in the growing role of dividends as a portion of personal income. According to a report by S&P Dow Jones Indices, the share of dividend income has risen from 2.68% in the fourth quarter of 1980 to 7.88% in the second quarter of 2024, highlighting dividends as a significant source of income. The report also mentioned that since 1936, dividends have contributed to over one-third of the broader market’s total equity returns, with the remaining two-thirds coming from capital appreciation.
This highlights how dividends have become increasingly important over the years. When considering inflation, dividends have outpaced it, suggesting that investors should focus on these stocks. A report by Wisdom Tree noted that from 1957 to 2023, dividends grew by an average of 5.7% annually, which is more than 2% higher than the inflation rate. The report also pointed out that in the last 64 years, dividends only declined in six years, and only once by more than 5%. In contrast, stock prices fell in 18 of those years, with the worst annual decline exceeding 40% and an average drop of over 11%. Stock prices were more than twice as volatile as the dividend cash flows, as short-term prices are more influenced by market sentiment, while long-term value is driven by cash flow stability.
Also read: 10 Highest Paying Monthly Dividend Stocks
When investing in dividend stocks, receiving payments more often is definitely a plus. Although most dividend stocks distribute payments to shareholders on a quarterly basis, there are a few hundred publicly traded companies that opt to pay dividends monthly instead. However, monthly dividend stocks have their downsides. While they offer appealing investment opportunities, their high yields can be misleading, often accompanied by multiple dividend cuts. The high yields are primarily due to the nature of the companies that opt for monthly payments, such as real estate investment trusts (REITs), closed-end funds, business development companies (BDCs), and royalty trusts, which are common among monthly dividend payers. That said, many monthly dividend companies have not only kept up their payouts over the years but have also increased them, all while maintaining high yields.
Once the risks associated with high yields are addressed, investors can concentrate on the benefits of compounding. Monthly dividend stocks provide cash to investors more frequently than other stocks, allowing them to reinvest it sooner and take advantage of faster compounding. Since 1960, 85% of the cumulative total return of the broader market Index can be traced back to reinvested dividends and the effects of compounding, as reported by Hartford Funds. With this, we will take a look at some of the best dividend stocks that offer monthly payouts.
Our Methodology:
For this list, we reviewed a list of companies providing monthly dividends to their shareholders. Among these, we specifically chose businesses with robust dividend practices, consistently maintaining their payouts across multiple years. The majority of these selected companies operate within the Real Estate Investment Trust (REIT) sector, as they are required to allocate 90% of their income towards dividends. From that list, we picked 10 stocks with the highest number of hedge fund investors, using Insider Monkey’s Q2 2024 database of 912 hedge funds and their holdings.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here).
Stocks
10. Prospect Capital Corporation (NASDAQ:PSEC)
Number of Hedge Fund Holders: 6
Prospect Capital Corporation (NASDAQ:PSEC) is an American business development company (BDC) that invests in debt and equity in US middle market businesses across various industries, aiming to provide consistent and attractive returns to its shareholders. It is one of the largest and most established BDCs, with total assets amounting to $7.9 billion. Founded in 2004, the company has a history spanning 20 years, having invested through the Great Financial Crisis—a period many other BDCs, with much shorter histories, did not experience. It emphasizes downside protection, with 81% of its portfolio consisting of first lien, secured, or underlying secured assets. Over its two-decade history, the company has invested $20.9 billion across 423 investments, successfully exiting 303 of them.
Prospect Capital Corporation (NASDAQ:PSEC) has delivered stronger total returns than the median of publicly traded BDCs, measured by the 5-year total change in NAV plus dividends. The stock achieved a 38.7% total increase in NAV plus dividends over five years, slightly outperforming the 38.1% increase reported by the median publicly traded BDC. In its fiscal Q4 2024, the company reported a total investment income of $212.2 million, which fell by over 4% from the same period last year. However, it beat analysts’ estimates by $6.64 million.
Prospect Capital Corporation (NASDAQ:PSEC), one of the best dividend stocks, declared a monthly dividend of $0.06 per share on August 28. This was the company’s 85th consecutive monthly dividend payment. Since its inception, the company has paid an aggregate of $4.3 billion in cumulative distributions to all common shareholders. The stock offers a dividend yield of 14.34%, as of August 29.
At the end of Q2 2024, 6 hedge funds tracked by Insider Monkey held stakes in Prospect Capital Corporation (NASDAQ:PSEC), compared with 9 in the previous quarter. These stakes are valued at over $3.6 million. Among these hedge funds, McKinley Capital Management was the company’s leading stakeholder in Q2.
9. Main Street Capital Corporation (NYSE:MAIN)
Number of Hedge Fund Holders: 8
Main Street Capital Corporation (NYSE:MAIN) is a Texas-based business development company that provides customized debt and equity financing to lower-middle-market companies and debt capital to middle-market companies. The company reported solid earnings in the second quarter of 2024, marking another period of strong operating results. It posted a return on equity of 16.1%, distributable net investment income per share that exceeded the dividends paid to shareholders, and a new record for net asset value per share for the eighth consecutive quarter. In addition to this, the company has strong liquidity and a conservative leverage profile, which would provide it opportunities in both its lower middle market and private loan investment strategies.
In the second quarter of 2024, Main Street Capital Corporation (NYSE:MAIN) reported a total investment income of $132 million, which showed a 3.58% growth from the same period last year, which also beat analysts’ estimates by over $1.09 million. In the second quarter of 2024, the total dividends paid to shareholders increased by 13% compared to the same period last year, continuing the company’s trend of raising dividends over the past few years. The distributable net investment income for the quarter exceeded the dividends paid to shareholders, surpassing the monthly dividends by 49% and the total dividends by 5%. Additionally, strong performance in the second quarter, along with a favorable outlook for the third quarter, led to the declaration of a $0.30 per share supplemental dividend, scheduled for payment in September 2024. This marks the company’s twelfth consecutive quarterly supplemental dividend, alongside eight increases to the regular monthly dividends since the fourth quarter of 2021, which makes it one of the best dividend stocks that pay monthly dividends.
Main Street Capital Corporation (NYSE:MAIN) currently pays a monthly dividend of $0.245 per share. The company also announced a supplemental dividend of $0.30 per share. The stock has a dividend yield of 6.03%, as of August 29.
As of the close of Q2 2024, 8 hedge funds in Insider Monkey’s database held stakes in Main Street Capital Corporation (NYSE:MAIN), down from 13 in the previous quarter. These stakes have a total value of over $21.4 million. McKinley Capital Management owned the largest stake in the company in Q2.
8. LTC Properties, Inc. (NYSE:LTC)
Number of Hedge Fund Holders: 12
LTC Properties, Inc. (NYSE:LTC) is an American real estate investment trust company, headquartered in California. The company invests in senior housing and healthcare facilities through sale-leasebacks. The company’s investment portfolio consists of 194 properties spread across 26 states, managed by 31 operating partners. The portfolio is evenly divided between senior housing and skilled nursing properties, each making up about 50% of the total gross real estate investments. In the second quarter of 2024, it originated a $12.7 million mortgage loan, secured by a skilled nursing and assisted living campus in Texas, which includes 78 units and 104 beds. This five-year, interest-only loan carries a current rate of 9.15%. The investment is structured as an unconsolidated joint venture and is projected to generate approximately $884,000 in revenue in 2024.
LTC Properties, Inc. (NYSE:LTC) has a strong balance sheet, which makes it one of the best dividend stocks that pay monthly dividends. At the end of Q2, it had total liquidity of $189.3 million, which includes $6.2 million in cash, $118.2 million available through its unsecured revolving line of credit, and the potential to raise $64.9 million by issuing common stock under its equity distribution agreements.
LTC Properties, Inc. (NYSE:LTC) has been making regular dividend payments to shareholders since 1992. It currently offers a monthly dividend of $0.19 per share and has a dividend yield of 6.22%, as of August 29.
LTC Properties, Inc. (NYSE:LTC) was a part of 12 hedge fund portfolios at the end of Q2 2024, compared with 13 in the previous quarter, as per Insider Monkey’s database. The stakes held by these funds have a total value of over $47.3 million. Among these hedge funds, Balyasny Asset Management was the company’s leading stakeholder in Q2.
7. Phillips Edison & Company, Inc. (NASDAQ:PECO)
Number of Hedge Fund Holders: 14
Phillips Edison & Company, Inc. (NASDAQ:PECO) is an Ohio-based real estate investment trust company that owns and develops shopping centers throughout the US. The company reported a strong quarter of growth and leading operating metrics. Year to date, same-center NOI grew by 2.8%, Nareit FFO increased by 4.1%, and Core FFO rose by 3.7%. This sustained strength in performance is due to their focused strategy of owning right-sized, grocery-anchored neighborhood shopping centers, anchored by the top two grocers in each market, the team’s effectiveness at driving property-level results, and the benefits of operating in suburban markets. Given the continued strong operating environment and the financial health of its tenants, the company has reaffirmed its full-year 2024 earnings guidance for Nareit and Core FFO per share, projecting year-over-year growth of 6.0% and 3.0% at the midpoints, respectively. It also reaffirmed its full-year 2024 earnings guidance for same-center NOI, expecting 3.75% year-over-year growth at the midpoint.
In the second quarter of 2024, Phillips Edison & Company, Inc. (NASDAQ:PECO) reported core funds from operations (CFFO) of $80 million, which showed a 3% growth from the same period last year. As of June 30, the company’s wholly-owned portfolio comprised 286 properties, covering around 32.6 million square feet across 31 states. This marks an increase from June 30, 2023, when the portfolio included 274 properties, totaling approximately 31.4 million square feet in the same 31 states.
Phillips Edison & Company, Inc. (NASDAQ:PECO) announced a monthly dividend of $0.0975 per share on July 31, which was in line with its previous dividend. The company started paying dividends in 2021 and has raised its payouts every year since then, which makes PECO one of the best dividend stocks on our list. The stock’s dividend sits at 3.17%, as of August 29.
The number of hedge funds tracked by Insider Monkey owning stakes in Phillips Edison & Company, Inc. (NASDAQ:PECO) jumped to 14 in Q2 2024, from 9 in the previous quarter. These stakes have a consolidated value of nearly $92 million.
6. Apple Hospitality REIT, Inc. (NYSE:APLE)
Number of Hedge Fund Holders: 19
Apple Hospitality REIT, Inc. (NYSE:APLE) is a Virginia-based real estate investment trust company that operates in hotel properties across the US. The company’s portfolio includes 224 hotels with over 30,000 guest rooms, spread across 87 markets in 37 states and the District of Columbia. The portfolio is concentrated on leading industry brands, featuring 100 Marriott-branded hotels, 119 Hilton-branded hotels, and five Hyatt-branded hotels.
In the second quarter of 2024, Apple Hospitality REIT, Inc. (NYSE:APLE)’s business fundamentals remained robust, supported by a slower rate of new supply growth compared to historical levels. Its comparable hotel occupancy reached 80%, which is more than a 2% increase from the same quarter in 2023. While the greatest potential for continued growth is expected from the ongoing improvement in midweek business travel demand, the company also achieved higher occupancy rates on both weekdays and weekends during the quarter. This reflects the resilience of leisure travel demand and the benefits being realized as business travel patterns return to normal. Comparable hotel revenue per available room (RevPAR) for the second quarter rose by 2.5% compared to the previous year, accompanied by a slight increase in average daily rate (ADR).
Apple Hospitality REIT, Inc. (NYSE:APLE), one of the best dividend stocks, has been making uninterrupted dividend payments to shareholders since 2008. The company offers a monthly dividend of $0.08 per share and has a dividend yield of 6.73%, as of August 29.
Apple Hospitality REIT, Inc. (NYSE:APLE) was a popular buy among elite funds during Q2 2024, with hedge fund positions growing to 19, from 13 in the previous quarter, according to Insider Monkey’s database. These stakes have a total value of more than $116.5 million. With over 2.6 million shares, Balyasny Asset Management was the company’s leading stakeholder in Q2.
5. Realty Income Corporation (NYSE:O)
Number of Hedge Fund Holders: 19
Realty Income Corporation (NYSE:O) ranks fifth on our list of the best dividend stocks that pay monthly dividends. The American real estate investment trust company mainly invests in single-tenant commercial properties in the country. The stock began to recover in July after experiencing a decline of more than 10% during the first half of the year. The reason for this decline was partly due to the increase in interest rates following the pandemic. With rates still higher than pre-pandemic levels and unlikely to return to those lows anytime soon, the company is well-positioned to take advantage of this new normal. Its year-to-date returns come in at nearly 5%.
The stability of Realty Income Corporation (NYSE:O)’s portfolio continues to support its balance sheet. In the second quarter of 2024, the company maintained a strong occupancy rate of 98.8%, captured 105.7% of the rent on re-leased properties, and achieved same-store rental revenue growth of 0.2%. The portfolio, primarily composed of single-tenant, net-leased properties, helps minimize financial strain. With tenants like Wynn Resorts, Dollar General, and FedEx, the company enjoys a steady revenue stream. In addition, the company manages over 15,000 commercial properties across 89 industries. Its resilience in recessions is evident, with major sectors such as supermarkets and convenience stores that perform well in any economic environment.
On August 15, Realty Income Corporation (NYSE:O) declared a monthly dividend of $0.263 per share, which was consistent with its previous dividend. The company is a Dividend Aristocrat, having raised its dividends for 30 consecutive years. Moreover, it has never missed a monthly payout in over 55 years. The stock has a dividend yield of 5.16%, as of August 29.
At the end of June 2024, 19 hedge funds in Insider Monkey’s database held stakes in Realty Income Corporation (NYSE:O), down from 25 in the previous quarter. These stakes have a total value of more than $135.3 million. Among these hedge funds, AEW Capital Management was the company’s leading stakeholder in Q2.
4. AGNC Investment Corp. (NASDAQ:AGNC)
Number of Hedge Fund Holders: 19
AGNC Investment Corp. (NASDAQ:AGNC) is a Maryland-based real estate investment trust company that invests in residential real estate mortgage markets. The company started paying dividends right after it went public in 2008. It initially issued quarterly dividends but transitioned to monthly payments in 2014 and has maintained this approach ever since. Since its inception, the company has returned $13.4 billion to shareholders through dividends, which makes AGNC one of the best dividend stocks on our list. The company offers a monthly dividend of $0.12 per share and has a dividend yield of 14.02%, as of August 29.
AGNC Investment Corp. (NASDAQ:AGNC)’s business model shows that it isn’t a traditional property-owning REIT. Instead, it’s a more risky approach. Unlike physical properties, which are rarely bought and sold, AGNC Investment’s assets are traded continuously throughout the day. This makes the value of its bond holdings highly sensitive to interest rate changes, whereas property prices tend to be more stable. Moreover, factors like mortgage repayment rates and housing market conditions also come into play. Monitoring the performance of a portfolio of physical properties, such as those held by an apartment REIT, is generally simpler than understanding the complexities of a portfolio made up of mortgage bonds.
Despite these inherent risks, AGNC Investment Corp. (NASDAQ:AGNC) is performing well this year. The stock is up by over 6% since the start of the year. As of June 30, the company managed an investment portfolio valued at $66.0 billion, which included $59.7 billion in Agency MBS, $5.3 billion in net forward purchases or sales of Agency MBS in the “to-be-announced” market, and $1.0 billion in credit risk transfer (CRT) and non-Agency securities, along with other mortgage credit investments.
Insider Monkey’s database of Q2 2024 indicated that 19 hedge funds owned stakes in AGNC Investment Corp. (NASDAQ:AGNC), which remained unchanged from the previous quarter. These stakes have a total value of over $92.7 million.
3. Agree Realty Corporation (NYSE:ADC)
Number of Hedge Fund Holders: 23
An American real estate investment trust company, Agree Realty Corporation (NYSE:ADC) ranks third on our list of the best dividend stocks that pay dividends monthly. One of the most appealing aspects of the company is its impressive growth over the years. At the beginning of 2013, the REIT owned just 109 properties. By the end of the second quarter of 2024, a little over a decade later, its portfolio had grown to more than 2,202 properties. This represents a significant increase, both in percentage terms and in absolute numbers.
In the second quarter of 2024, Agree Realty Corporation (NYSE:ADC) reported revenue of $152.5 million, which showed a 17.4% growth from the same period last year. During the quarter, the company raised nearly $650 million to further strengthen its balance sheet, bringing total liquidity to $1.7 billion after the closing of the expanded Credit Facility. With growing pipelines across all three external growth platforms, it is confident enough to increase its full-year acquisition guidance to approximately $700 million. Due to accelerating investment activity and strong portfolio performance so far this year, the company has raised its 2024 AFFO per share guidance to a range of $4.11 to $4.14, representing 4.4% growth at the midpoint.
Agree Realty Corporation (NYSE:ADC) started paying quarterly dividends in 1995 and shifted to monthly payments in 2021. The company currently offers a monthly payout of $0.25 per share, having raised it by 12.5% in April this year. Through this increase, the company stretched its dividend growth streak to seven years, which makes it one of the best dividend stocks on our list. As of August 29, the stock has a dividend yield of 4.12%.
According to Insider Monkey’s database of Q2 2024, 23 hedge funds held stakes in Agree Realty Corporation (NYSE:ADC), compared with 27 in the previous quarter. These stakes have a total value of over $401.3 million. With more than 2.5 million shares, Long Pond Capital was the company’s leading stakeholder in Q2.
2. STAG Industrial, Inc. (NYSE:STAG)
Number of Hedge Fund Holders: 28
STAG Industrial, Inc. (NYSE:STAG) is a real estate investment trust company that acquires and operates industrial properties throughout the US. This sector has thrived in the post-pandemic period, largely due to disrupted supply chains and initiatives to bring production back to domestic locations. In the past 12 months, the stock is up by over 8%.
STAG Industrial, Inc. (NYSE:STAG) reported strong operating performance in the second quarter of 2024. The company acquired ten buildings totaling 2.2 million square feet for $225.6 million, with a Cash Capitalization Rate of 6.7% and a Straight-Line Capitalization Rate of 7.0%. Additionally, it sold seven buildings, totaling 1.1 million square feet, for $78.2 million. As of June 30, 2024, the company achieved an Occupancy Rate of 97.1% across its entire portfolio and 97.5% within its Operating Portfolio. Its performance this quarter has led to favorable ratings from analysts. On June 26, Moody’s Investor Services confirmed an investment grade rating of Baa3 for the company and upgraded its outlook from ‘Stable’ to ‘Positive’.
STAG Industrial, Inc. (NYSE:STAG) generated roughly $190 million in revenues in the second quarter of 2024, which saw a 10.5% growth from the same period last year. The revenue also beat analysts’ estimates by $1.66 million. Its balance sheet also showed strength as the company ended the quarter with over $33.2 million available in cash and cash equivalents, up from $20.7 million six months ago.
STAG Industrial, Inc. (NYSE:STAG) offers a monthly dividend of $0.1233 per share. It is one of the best dividend stocks on our list as the company has been making regular dividend payments to shareholders since 2011. The stock’s dividend yield on August 29 came in at 3.70%.
STAG Industrial, Inc. (NYSE:STAG) also attracted hedge funds’ attention during Q2 2024. The number of hedge funds in Insider Monkey’s database owning investments in the company jumped to 28, from 15 in the previous quarter. Their total stake value is roughly $176 million. Among these hedge funds, Balyasny Asset Management owned the largest stake in the company.
1. EPR Properties (NYSE:EPR)
Number of Hedge Fund Holders: 30
EPR Properties (NYSE:EPR) invests in theaters, fitness, and wellness properties. The American real estate investment trust company faced challenges from rising interest rates and ongoing issues with some theater tenants affected by the pandemic. However, it has made progress in overcoming these difficulties. For instance, last year it completed a thorough lease restructuring agreement with a bankrupt theater tenant. As a result, the company has managed to expand its portfolio, increase its cash flow, and raise its dividend.
In the second quarter of 2024, EPR Properties (NYSE:EPR) generated over $173 million in total revenues, which grew modestly by 0.11% from the same period last year. The revenue also surpassed analysts’ estimates by $22.2 million. During the quarter, the company spent $46.9 million on investments, raising the total investment expenditure for the year to $132.7 million. It plans to invest between $200 million and $300 million in new properties this year, using free cash flow remaining after dividends and leveraging its robust balance sheet. As interest rates decrease, the company anticipates being able to increase its investment spending, which should enhance its earnings growth and enable future dividend increases.
On August 15, EPR Properties (NYSE:EPR) declared a monthly dividend of $0.285 per share, which was in line with its previous dividend. The stock’s dividend yield sits at 7.26%, as of August 29.
As of the end of the second quarter of 2024, 30 hedge funds held stakes in EPR Properties (NYSE:EPR), up from 26 in the previous quarter, as per Insider Monkey’s database. These stakes have a total value of more than $223 million.
Overall, EPR Properties (NYSE:EPR) ranks first on our list. While we acknowledge the potential for EPR to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than NVDA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.
Disclosure: None. This article is originally published at Insider Monkey.
