In this article, we discuss 12 monthly dividend stocks with over 5% yield. You can skip our detailed analysis of some of the best dividend stocks and their past performance, and go directly to read 5 Monthly Dividend Stocks with Over 5% Yield.
Dividend stocks have retained their importance over the years, consistently playing a vital role in shaping overall returns throughout the years. According to Hartford Fund’s research, dividends accounted for an average of 34% of the total return of the S&P 500 from 1940 to 2023. This figure is compelling enough to grab investors’ attention, particularly those seeking to invest with a long-term goal. The addition of many strong tech companies in the dividend club this year has heightened investor interest in these equities. Howard Silverblatt, Senior Index Analyst at S&P Dow Jones Indices, spoke about this shift in the firm’s first quarter 2024 dividend report. Here are some comments from the analyst:
“The noticeable take-away for the quarter were the large-caps. Three issues, Meta Platforms, Salesforce, and Booking Holdings, all initiated multi-billion dividends ($7.2 billion annually). 20 years ago, Microsoft and QUALCOMM started paying a dividend and were criticized for giving up on growth. This past quarter though, investors did not comment on growth or reinvesting capital, which indicates a clear change in their views and approach compared to Q1 2003.”
Dividend stocks have not only contributed to the market’s overall returns but have also consistently surpassed inflation rates. In addition to this, they have shown less volatility compared to non-dividend stocks. In our article, 25 Things Every Dividend Investor Should Know, we referred to Wisdom Tree’s data and revealed that between 1957 and 2022, dividends grew by an annual average rate of 5.7%, exceeding the inflation rate by over 2%. Similarly, from 1990 to 2022, inflation grew by 2.64%, compared with a 5.61% growth rate of dividends in the S&P 500. We also highlighted that over the past 64 years, there have been six instances where dividends decreased, with only one instance showing a decline of over 5%. In contrast, stock prices declined in 18 of those years, with the most significant yearly drop exceeding 40%.
Also read: 10 Dividend Stocks Insiders are Buying in May
Dividend yield plays an important role in dividend investing as it indicates how much income an investor can expect to receive in the form of dividends relative to the stock price. High-yield dividend stocks have also shown strong returns historically, contrary to popular belief that high yields are a sign of financial trouble. In one of our articles on the subject, we cited data from Newton Investment Management (NIM) and highlighted that stocks with high dividend yields outperformed the broader market during high inflationary periods from 1940 to 2021. The NIM report also revealed that investment portfolios consisting of high-yield dividend stocks surpassed those comprised of low or zero-dividend-yield stocks when considering their value-weighted performance. Specifically, they outperformed low-yield portfolios by 199 basis points and zero-yield portfolios by 330 basis points.
Altria Group, Inc. (NYSE:MO), Verizon Communications Inc. (NYSE:VZ), and British American Tobacco p.l.c. (NYSE:BTI) are some of the best dividend stocks with high yields. In addition to this, these companies have also raised their payouts for years. These corporations offer quarterly dividends to shareholders, however, we will discuss some of the best dividend stocks with monthly payouts and yields above 5%.
Photo by nick chong on Unsplash
Our Methodology:
We looked through a list of companies that pay monthly dividends and picked those with yields above 5% as of May 12. While analysts don’t usually recommend stocks with extremely high dividend yields because they may indicate financial issues, we chose companies with a consistent history of stable dividends despite their high yields. The stocks are ranked in ascending order of their dividend yields, as of May 12. We also mentioned hedge fund sentiment data for these stocks using Insider Monkey’s database of 933 hedge funds as of Q4 2023. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here).
12. Realty Income Corporation (NYSE:O)
Dividend Yield as of February 12: 5.61%
Realty Income Corporation (NYSE:O) is a California-based real estate investment trust company that invests in single-tenant commercial properties. On April 9, the company declared a monthly dividend of $0.257 per share, which was in line with its previous dividend. It is one of the best dividend stocks on our list as the company has been growing its dividends regularly since 1994. The stock has a dividend yield of 5.61%, as of May 12.
The number of hedge funds tracked by Insider Monkey owning stakes in Realty Income Corporation (NYSE:O) grew to 27 in Q4 2023, from 23 in the previous quarter. The consolidated value of these stakes is over $332.5 million. Among these hedge funds, Millennium Management was the company’s leading stakeholder in Q4.
11. Main Street Capital Corporation (NYSE:MAIN)
Dividend Yield as of February 12: 5.83%
Main Street Capital Corporation (NYSE:MAIN) is an American business development company that provides debt and equity financing to lower-middle market companies. In the first quarter of 2024, the company reported a total investment income of $131.6 million, which showed a 9.44% growth from the same period last year. It ended the quarter with nearly $115 million available in cash and cash equivalents, up from $60 million in the previous quarter.
Main Street Capital Corporation (NYSE:MAIN), one of the best dividend stocks with monthly payouts, currently pays a monthly dividend of $0.245 per share, having raised it by 2.1% on May 7. The company has been making regular dividend payments to shareholders since 2007. In addition to this, it also has a history of paying supplemental dividends to shareholders. The stock has a dividend yield of 5.83%, as of May 12.
At the end of Q4 2023, 13 hedge funds in Insider Monkey’s database held stakes in Main Street Capital Corporation (NYSE:MAIN), up from 12 in the previous quarter. These stakes are valued at more than $52.8 million.
10. Apple Hospitality REIT, Inc. (NYSE:APLE)
Dividend Yield as of February 12: 6.47%
Apple Hospitality REIT, Inc. (NYSE:APLE) is next on our list of the best dividend stocks with monthly payouts. The American real estate investment trust company mainly invests in hotel properties across the country. The company currently offers a monthly dividend of $0.08 per share and has a dividend yield of 6.47%, as of May 12. It has never missed a dividend for nearly a decade and has also paid special dividends to shareholders multiple times over this course.
As of the end of Q4 2023, 15 hedge funds tracked by Insider Monkey held stakes in Apple Hospitality REIT, Inc. (NYSE:APLE), growing from 10 in the previous quarter. The collective value of these stakes is nearly $182 million. With over 5.5 million shares, Citadel Investment Group was the company’s leading stakeholder in Q4.
9. LTC Properties, Inc. (NYSE:LTC)
Dividend Yield as of February 12: 6.69%
LTC Properties, Inc. (NYSE:LTC) is an American real estate investment trust company, headquartered in California. The company invests in senior housing and healthcare properties. In the first quarter of 2024, the company generated over $51.3 million in revenues, which showed a 3.8% growth from the same period last year. At the end of the quarter, it had over $9 million available in cash and cash equivalents and its total assets amounted to roughly $2 billion.
LTC Properties, Inc. (NYSE:LTC)’s monthly dividend comes in at $0.19 per share. With a dividend yield of 6.69% as of May 12, LTC is one of the best dividend stocks on our list.
LTC Properties, Inc. (NYSE:LTC) was a part of 11 hedge fund portfolios at the end of Q4 2023, which remained the same as in the previous quarter, as per Insider Monkey’s database. The stakes owned by these hedge funds have a collective value of more than $27.3 million.
8. Gladstone Commercial Corporation (NASDAQ:GOOD)
Dividend Yield as of February 12: 8.13%
Gladstone Commercial Corporation (NASDAQ:GOOD) is a Virginia-based real estate investment trust company that invests in single-tenant industrial and office properties. The company offers a monthly dividend of $0.10 per share and has a dividend yield of 8.13%, as of May 12. It is one of the best dividend stocks on our list with monthly payouts.
Insider Monkey’s database of Q4 2023 showed that 5 hedge funds held stakes in Gladstone Commercial Corporation (NASDAQ:GOOD), the same as in the previous quarter. These stakes have a consolidated value of over $25.7 million. CastleKnight Management was the company’s leading stakeholder in Q4 among these hedge funds.
7. EPR Properties (NYSE:EPR)
Dividend Yield as of February 12: 8.23%
EPR Properties (NYSE:EPR) is another real estate investment trust company on our list of the best dividend stocks with over 5% yields. The company invests in amusement parks, movie theaters, and other entertainment properties. It has been paying regular dividends to shareholders since 1997 and currently offers a monthly dividend of $0.285 per share. The stock has a dividend yield of 8.23%, as of May 12.
In the first quarter of 2024, EPR Properties (NYSE:EPR) reported revenue of $167.2 million, which beat analysts’ estimates by $18 million. The company ended the quarter with nearly $60 million available in cash and cash equivalents and its total assets for the period came in at $5.7 billion.
EPR Properties (NYSE:EPR) remained popular among elite funds at the end of Q4 2023 as hedge fund positions in the company jumped to 25, from 15 in the previous quarter, according to Insider Monkey’s database. These stakes are worth over $195.7 million in total.
6. PennantPark Floating Rate Capital Ltd. (NYSE:PFLT)
Dividend Yield as of February 12: 10.69%
An American business development company, PennantPark Floating Rate Capital Ltd. (NYSE:PFLT) is next on our list of the best dividend stocks with over 5% yield. On May 3, the company declared a monthly dividend of $0.1025 per share, which fell in line with its previous dividend. Overall, it has been making regular dividend payments to shareholders since 2016. The stock has a dividend yield of 10.69%, as recorded on May 12.
As per Insider Monkey’s database of Q4 2023, 9 hedge funds held stakes in PennantPark Floating Rate Capital Ltd. (NYSE:PFLT), which remained unchanged from the previous quarter. The consolidated value of these stakes is nearly $20 million. Among these hedge funds, Two Sigma Advisors was the company’s leading stakeholder in Q4.
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Disclosure. None. 12 Monthly Dividend Stocks with Over 5% Yield is originally published on Insider Monkey.