In this article, we will discuss some of the best monthly dividend stocks with over 5% yield.
Dividend stocks have always been a go-to choice for investors, no matter how frequently they receive payouts. Companies carefully decide how often to reward their shareholders. While annual or semi-annual dividends can offer larger sums, their unpredictability can leave investors in a bit of a pickle. Most major firms stick to quarterly payouts for practical reasons, but some opt for monthly distributions, which many investors find appealing as they provide a steady flow of passive income. Monthly payouts offer immediate cash flow, helping with day-to-day financial management. Moreover, a cut in monthly dividends would have a smaller immediate impact, making them feel almost like a regular paycheck. However, history shows that while companies offering monthly dividends may offer higher yields, they sometimes fall short on maintaining consistent dividend policies.
Regardless of how often they are paid, dividend stocks have delivered impressive returns over the years. Investors often aim to reduce risk in their portfolios, and dividend stocks offer a dependable way to do so. A report by S&P Dow Jones Indices underscored the growing importance of dividends as a source of personal income. Over the years, dividend income has consistently increased, rising from 2.68% in late 1980 to 7.88% by mid-2024. In contrast, interest income has declined, falling from 14.58% to 7.61% during the same timeframe.
Analysts also suggest adding dividend stocks to portfolios due to the advantages they offer. Savita Subramanian, an equity and quant strategist at Bank of America Corp., also recommended that investors increase their holdings of dividend stocks. Here are some comments from the analyst:
“You want to be in safe dividends — and I know this is the most boring call of all time, but sometimes boring is good. We believe that we are now in a total return world in which the contribution of dividends to total market returns could be significantly higher than it was in the last decade, a period marked by falling cash yields and lofty price returns. We advise investors to seek out companies with above-market and secure (not stretched) dividend yields.”
Within dividend strategy, investors are increasingly drawn to companies that regularly boost their dividends, prompting many firms to focus on sustaining and growing these payments, even in tough economic times. This approach has proven effective, as companies with a track record of dividend growth have yielded impressive long-term returns. A report by Cohen & Steers highlighted that from 2000 to 2010, dividend-paying firms outperformed their non-paying counterparts by an annual margin of 620 basis points, while also experiencing significantly lower risk, as indicated by standard deviation. Over a 30-year period ending in 2011, the advantages of dividend-paying companies became even clearer, with those initiating or increasing dividends consistently outperforming both other dividend-payers and non-payers, delivering higher returns with less volatility.
Although dividend stocks underperformed in 2024, their outlook remains promising. Analysts expect a strong rebound for these stocks, especially with the addition of several major tech companies to the dividend-paying ranks, signaling potential growth in this sector. Given this, we will take a look at some of the best dividend stocks that pay monthly dividends.
Photo by Viacheslav Bublyk on Unsplash
Our Methodology:
For this article, we looked through a list of companies that pay monthly dividends and picked those with yields above 5% as of January 14. 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. We also considered hedge fund sentiment around each stock using Insider Monkey’s data for Q3 2024.
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).
12. Main Street Capital Corporation (NYSE:MAIN)
Dividend Yield as of January 14: 5.10%
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 stock has outperformed the broader market in the past 12 months, surging by over 34.3%. The company ranks highly in cost efficiency, with an annualized Operating Expenses to Assets Ratio of 1.3%. This figure, representing non-interest operating expenses as a percentage of the average total assets for the quarter, remained steady for both the quarter and the twelve-month period ending September 30, 2024.
In the third quarter of 2024, Main Street Capital Corporation (NYSE:MAIN) posted a total investment income of $136.8 million, marking an 11% increase compared to the same period in the previous year. The company completed $51.6 million in investments within its lower middle market (LMM) portfolio, which included an $11.2 million investment in a new LMM portfolio company. Moreover, its cash position remained strong, ending the quarter with $84.4 million in cash and cash equivalents, up from $60 million at the end of December 2023.
In addition to paying monthly dividends, Main Street Capital Corporation (NYSE:MAIN) also has a reputation for paying supplemental dividends to shareholders. In November, the company achieved its 13th consecutive quarter of paying supplemental dividends, which makes MAIN one of the best dividend stocks on our list. It currently pays a monthly dividend of $0.30 per share and has a dividend yield of 5.10%, as of January 14.
At the end of Q3 2024, 7 hedge funds tracked by Insider Monkey held stakes in Main Street Capital Corporation (NYSE:MAIN), compared with 8 in the previous quarter. These stakes are worth over $21 million in total.
11. Gladstone Land Corporation (NASDAQ:LAND)
Dividend Yield as of January 14: 5.35%
Gladstone Land Corporation (NASDAQ:LAND) is a real estate investment trust company that owns and acquires farmlands and farm-related properties. In the past 12 months, the stock has fallen by over 26%. The decline was due to challenges the company faced from lower crop prices, which affected some of its tenants. Consequently, it had to reclaim 20 farms, either leaving them unoccupied or managing them directly. In addition, the company renegotiated some leases, accepting lower initial rental rates in return for a larger share of future crop revenues.
However, investors need not worry too much about this issue, as Gladstone Land Corporation (NASDAQ:LAND) expects to resolve it by the end of the year. The company anticipates higher revenue in the second half of 2025, aligning with the harvest season. This boost should help the REIT maintain its dividend growth going forward.
Gladstone Land Corporation (NASDAQ:LAND) saw a strong performance in the third quarter of 2024 from its annual row crop farms in California and Florida, with both value and rental income increasing. However, many permanent crop farms in the western regions have struggled with falling crop prices, higher input costs, and water availability concerns. To address these challenges, the company implemented a new leasing strategy for some of these farms. This approach provides tenants with a cash allowance to help cover expenses, in return for the company receiving a larger share of the gross crop proceeds. Although this is intended as a temporary solution, it is viewed as the most profitable option for these farms due to their history of high yields, solid crop insurance, and rising crop prices.
Gladstone Land Corporation (NASDAQ:LAND) has pleased investors with its dividend performance. The company has paid 141 consecutive monthly dividends to shareholders and increased its payouts 35 times over the last 39 years. Currently, it pays a monthly dividend of $0.0467 per share and has a dividend yield of 5.35%, as of January 14.
As of the close of Q3 2024, 5 hedge funds in Insider Monkey’s database owned stakes in Gladstone Land Corporation (NASDAQ:LAND), down from 9 in the preceding quarter. These stakes have a consolidated value of more than $6.5 million.
10. Realty Income Corporation (NYSE:O)
Dividend Yield as of January 14: 5.96%
Realty Income Corporation (NYSE:O) ranks tenth on our list of the best dividend stocks with over 5% yield. The American real estate investment trust company invests in single-tenant commercial properties in the country. Among the several REITs in the US, Realty Income distinguishes itself as exceptional. Over the last 30 years, it has navigated significant events like the dot-com crash, the Great Recession, and the coronavirus pandemic, all while consistently increasing its dividend. Even at the height of the Great Recession, its occupancy rates never fell below 96.6%, and they currently stand at approximately 98.7%. In summary, the company has maintained a strong business and proven its resilience during tough financial periods.
One of the main reasons for this stability is that Realty Income Corporation (NYSE:O) boasts a solid financial foundation with an investment-grade balance sheet. Its substantial size facilitates easier access to capital markets, allowing it to obtain favorable rates on debt to support growth. In addition, its financial strength and stability make it more advantageous to issue stock on Wall Street at attractive prices.
Realty Income Corporation (NYSE:O) is among the best monthly dividend stocks, having steadily increased its payouts since its IPO in 1994. On December 10, the company raised its monthly dividend by 0.2%, bringing it to $0.264 per share. This marks the fifth dividend hike in 2024. The stock supports a dividend yield of 5.96%, as of January 14.
Parnassus Investments highlighted Realty Income Corporation (NYSE:O) in its Q3 2024 investor letter. Here is what the firm has to say:
“Realty Income Corporation (NYSE:O) is poised to benefit from lower interest rates. Because its commercial tenants are mostly on 10-year leases, the stock’s steady dividend stream is attractive in the current environment of slow deceleration in the economy with rates coming down. In this favorable backdrop, the company also continues to execute well.”
The number of hedge funds tracked by Insider Monkey owning stakes in Realty Income Corporation (NYSE:O) grew to 23 in Q3 2024, from 19 in the previous quarter. These stakes are worth over $163.5 million in total. Among these hedge funds, AEW Capital Management was the company’s leading stakeholder in Q3.
9. Apple Hospitality REIT, Inc. (NYSE:APLE)
Dividend Yield as of January 14: 6.50%
Apple Hospitality REIT, Inc. (NYSE:APLE) is a Virginia-based real estate investment trust company that mainly operates in hotel properties across the US. In the third quarter of 2024, business travel demand gradually improved, while leisure travel stayed strong, supporting solid operational performance across the portfolio. Comparable Hotels saw a RevPAR increase of about 1% compared to the third quarter of 2023. Preliminary October figures showed occupancy around 80% with additional growth in the average daily rate (ADR). The company’s Q3 revenue reached $378.8 million, a 5.75% increase from the same period last year, with operating income growing 2% year-over-year to $77.7 million.
Apple Hospitality REIT, Inc. (NYSE:APLE) has also grabbed investors’ attention on the dividend front. The company has been making regular dividend payments since 2008. In addition, it also has a history of rewarding shareholders with supplemental dividends. The company’s monthly dividend comes in at $0.05 per share. With a dividend yield of 6.5% as of January 14, APLE is one of the best dividend stocks on our list.
Analysts have also appreciated Apple Hospitality REIT, Inc. (NYSE:APLE)’s performance and its portfolio. In December, BMO Capital began covering the stock with an Outperform rating and a price target of $18. An analyst noted that the company is the largest dedicated select-service lodging REIT, highlighting its high-quality and diverse portfolio. In a research note, the firm expressed a positive outlook, emphasizing the company’s defensive strengths and its potential to benefit from increases in revenue per available room (RevPAR).
Apple Hospitality REIT, Inc. (NYSE:APLE) was included in 19 hedge fund portfolios at the end of Q3 2024, the same as in the previous quarter, as per Insider Monkey’s database. The stakes owned by these funds are worth more than $98.4 million. Among these hedge funds, Balyasny Asset Management was the company’s leading stakeholder in Q3.
8. LTC Properties Inc. (NYSE:LTC)
Dividend Yield as of January 14: 6.70%
LTC Properties Inc. (NYSE:LTC) is an American real estate investment trust company that invests in senior housing and healthcare facilities through sale-leasebacks. Recently, JMP Securities upgraded the stock to Market Outperform and maintained a $40 price target on the shares. According to the firm, the company’s operators have fully bounced back from the pandemic’s impact, resolving previous uncertainties about the company’s cash flow. This recovery marks an important milestone for LTC, stabilizing its financial position and enhancing its growth potential.
In the third quarter of 2024, LTC Properties Inc. (NYSE:LTC) reported revenue of $55.7 million, reflecting a 13% increase compared to the same period last year. The revenue growth was driven by income from previously transitioned portfolios, higher income from loan originations, construction loan funding in 2024, and increased rental income, though it was partially offset by lower revenue from property sales. As previously disclosed, the company allocated $26.1 million for a mortgage loan to finance the construction of a 116-unit senior living community in Illinois, which will offer independent living, assisted living, and memory care. The borrower has already invested $12.3 million in equity to begin construction, and the full loan commitment is expected to be utilized by early 2025.
LTC Properties Inc. (NYSE:LTC) had a strong quarter in terms of cash flow. By the end of September, the company held more than $35 million in cash and cash equivalents, up from $20.2 million at the end of 2023. This solid cash position has enabled the company to pay regular monthly dividends to shareholders since 2005, after having quarterly payouts since 1992. It offers a monthly dividend of $0.19 per share for a dividend yield of 6.70%, as recorded on January 14.
Insider Monkey’s database of Q3 2024 indicated that 13 hedge funds owned stakes in LTC Properties Inc. (NYSE:LTC), up from 12 in the previous quarter. These stakes have a total value of over $75 million. Among these funds, Balyasny Asset Management was the company’s leading stakeholder in Q3.
7. EPR Properties (NYSE:EPR)
Dividend Yield as of January 14: 7.52%
An American real estate investment trust company, EPR Properties (NYSE:EPR) eases its properties to various entertainment and educational businesses, including amusement parks, movie theaters, and ski resorts, across the US and Canada.
Analysts have not been particularly fond of the company’s business model, as EPR Properties (NYSE:EPR) focuses solely on experiential assets. Owning properties that provide entertainment and bring people together in group settings was a challenging business during the coronavirus pandemic. As a result, the company reduced its dividend in 2020 and completely eliminated it after posting a significant $156 million net loss for the year. The company reinstated the dividend in the second half of 2021.
That said, while movie theater operators are still facing challenges, the rest of the REIT’s tenants are in a stronger position now than they were before the pandemic. To quantify this, rent coverage outside of theaters was 1.9 times in 2019 and has since risen to 2.1, indicating a significant increase in how much rent payments cover EPR’s property ownership expenses. Moreover, EPR Properties (NYSE:EPR) reached a 99% occupancy rate at the end of Q3 2024. It achieved this by selling vacant theaters, bringing in more non-theater tenants for experiential businesses, and growing its portfolio of education-related properties.
During the quarter, EPR Properties (NYSE:EPR) completed the sale of two theater properties and one early childhood education center, raising net proceeds of $8.7 million. The company’s cash position remained solid, finishing the quarter with more than $35.3 million in cash and total assets nearing $5.7 billion.
EPR Properties (NYSE:EPR) has been making regular dividend payments to shareholders since its IPO in 1997. The company shifted to monthly payments in 2013 and currently offers a monthly dividend of $0.285 per share. With a dividend yield of over 7.5% as of January 14, EPR is one of the best monthly dividend stocks.
At the end of Q3 2024, 23 hedge funds tracked by Insider Monkey held stakes in EPR Properties (NYSE:EPR), worth over $247.4 million. Jim Simons’ Renaissance Technologies was the firm’s leading stakeholder in Q3.
6. Fortitude Gold Corporation (OTC:FTCO)
Dividend Yield as of January 14: 9.38%
Fortitude Gold Corporation (OTC:FTCO) ranks sixth on our list of the best dividend stocks that pay monthly dividends. The US-based gold producer mainly focuses on projects that offer low operating costs, high capital returns, and strong profit margins. The company recently announced preliminary fourth-quarter production of 4,119 ounces of gold. In total, it produced around 16,472 ounces of gold in 2024 from both its Isabella Pearl mine operations and residual leach from the Isabella Pearl heap leach pad. Since the start of 2025, the stock has surged by over 3%.
In the third quarter of 2024, Fortitude Gold Corporation (OTC:FTCO) reported revenue of $10.2 million and produced 4,220 ounces of gold. Its cash position also remained strong as the company ended the quarter with $30.3 million available in cash and cash equivalents. The company’s total assets amounted to over $127 million. For 2025, Fortitude Gold Corporation (OTC:FTCO) continues to prioritize its County Line project as the next mine build in Nevada, along with the Scarlet expansion at the Isabella Pearl trend and the Golden Mile project. It will remain focused on securing as many mine permits as possible over the next four years.
Fortitude Gold Corporation (OTC:FTCO) started paying dividends in 2021 and has paid regular dividends since then. Currently, it pays a monthly dividend of $0.04 per share and has a dividend yield of 9.38%, as of January 13. The company remained committed to its shareholder obligation as it returned $2.9 million to investors through dividends in the most recent quarter.
5. PennantPark Floating Rate Capital Ltd. (NYSE:PFLT)
Dividend Yield as of January 14: 11.11%
PennantPark Floating Rate Capital Ltd. (NYSE:PFLT) is an American business development company that provides senior secured first lien notes. Many of these loans have floating interest rates, which is reflected in the company’s name. As of September 30, approximately $1.75 billion of the company’s $1.98 billion portfolio, spread across 158 businesses, consisted of first-lien credit. The rest of the portfolio included other types of loans and dividend payouts from the companies in which it invests.
In the fourth quarter of 2024, PennantPark Floating Rate Capital Ltd. (NYSE:PFLT) reported net investment income of over $55.5 million, which grew by 55.3% from the same period last year. The company’s investment portfolio totaled nearly $2 billion and its net assets amounted to over $877 million. Its overall portfolio comprised 158 companies, with an average investment size of $12.6 million and a weighted average yield on debt investments of 11.5%. It was allocated 88% in first-lien secured debt, less than 1% in second-lien secured debt and subordinated debt, and 12% in preferred and common equity. As of September 30, 2024, over 99% of the investments held by PennantPark Senior Secured Loan Fund I LLC, or PSSL, were first-lien-secured debt.
PennantPark Floating Rate Capital Ltd. (NYSE:PFLT), one of the best dividend stocks, has been making regular dividend payments to shareholders since 2011. The company currently pays a monthly dividend of $0.1025 per share and has a dividend yield of 11.11%, as of January 14.
Insider Monkey’s database of Q3 2024 indicated that 7 hedge funds owned stakes in PennantPark Floating Rate Capital Ltd. (NYSE:PFLT), compared with 9 in the previous quarter. These stakes are collectively valued at more than $30.8 million.
4. Ellington Financial Inc. (NYSE:EFC)
Dividend Yield as of January 14: 12.80%
Ellington Financial Inc. (NYSE:EFC) is an American specialty finance company, based in Connecticut. The company acquires and manages a range of financial assets, including those related to mortgages, consumers, corporations, and other financial sectors. Its primary objective is to provide attractive, risk-adjusted total returns to its shareholders by investing in opportunities that are anticipated to offer suitable rewards for the risks involved.
In the third quarter of 2024, Ellington Financial Inc. (NYSE:EFC)’s investment portfolio grew as the company leveraged its strong balance sheet to expand its high-yielding loan portfolios. During the quarter, the company’s non-QM loan, residential transition loan, commercial mortgage bridge loan, HELOC, and closed-end second-lien loan portfolios increased by a combined 26%, which led to a modest rise in leverage, even as the company reduced its Agency portfolio and preserved additional capital for future investments.
In addition, Ellington Financial Inc. (NYSE:EFC)’s cash position also remained strong which makes it a solid dividend payer. The company ended the quarter with nearly $218 million available in cash and cash equivalents, compared with $198.5 million at the end of June 2024. Its total assets came in at nearly $16 billion, up from $15.3 billion in the same period last year.
Ellington Financial Inc. (NYSE:EFC) is one of the best dividend stocks as the company has never missed a dividend in the past 15 years. On January 9, it declared a monthly dividend of $0.13 per share, which was in line with its previous dividend. The stock offers an attractive dividend yield of 12.8%, as of January 14.
The number of hedge funds tracked by Insider Monkey owning stakes in Ellington Financial Inc. (NYSE:EFC) grew to 9 in Q3 2024, from 5 in the previous quarter. These stakes have a consolidated value of more than $45.4 million. With over 1.1 million shares, Levin Easterly Partners was the company’s leading stakeholder in Q3.
3. AGNC Investment Corp. (NASDAQ:AGNC)
Dividend Yield as of January 14: 15.58%
AGNC Investment Corp. (NASDAQ:AGNC) is an American real estate investment trust company that mainly invests in residential mortgage-backed securities. The company’s net spread and dollar roll income per share, which is the key metric for assessing its profits, decreased over the past year due to a sluggish mortgage market and slower-than-expected interest rate cuts by the Fed. However, its tangible net book value per share increased year-over-year as the value of its underlying investments rose.
Despite the associated risks, AGNC Investment Corp. (NASDAQ:AGNC) is still a solid investment. As a mortgage REIT, it invests in mortgages that have been packaged into bond-like securities, rather than owning properties and leasing them to tenants like most REITs. In some respects, it operates like a mutual fund, with the company’s value being tied to the value of its mortgage securities portfolio. In addition, as of June 30, 2024, the company’s investment portfolio was valued at $66.0 billion. This portfolio comprised $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.
AGNC Investment Corp. (NASDAQ:AGNC) has been making regular dividend payments to shareholders since it went public in 2008. The company shifted to monthly payments in 2014. Since 2008, it has returned $13.4 billion to shareholders through dividends. It pays a monthly dividend of $0.12 per share and has a dividend yield of 15.58%, as of January 14.
AGNC Investment Corp. (NASDAQ:AGNC) was popular among elite funds in Q3 2024 with 24 hedge funds holding stakes in the company, up from 19 in the previous quarter, according to Insider Monkey’s database. These stakes have a consolidated value of more than $230.3 million. With over 12 million shares, Citadel Investment Group was the company’s leading stakeholder in Q3.
2. ARMOUR Residential REIT, Inc. (NYSE:ARR)
Dividend Yield as of January 14: 15.87%
ARMOUR Residential REIT, Inc. (NYSE:ARR) is a Florida-based real estate investment trust company that mainly invests in mortgage-backed securities. In the third quarter of 2024, the company’s Agency MBS portfolio amounted to $12.4 billion, up from $8.9 billion in the previous quarter. It reported net repurchase agreements totaling $10.2 billion, with 41.4% of these agreements conducted through its affiliate, BUCKLER Securities LLC. In addition, the company’s debt-to-equity ratio stood at 7.74:1.
ARMOUR Residential REIT, Inc. (NYSE:ARR) is dedicated to fostering homeownership for a broad and diverse segment of Americans. Its strategy for creating shareholder value involves thoughtfully investing in and managing a leveraged, diversified portfolio of MBS. Moreover, the company focuses on sustaining dividends on common shares that align with intermediate-term goals, rather than reacting to short-term market changes.
On December 27, 2024, ARMOUR Residential REIT, Inc. (NYSE:ARR) declared a monthly dividend of $0.24 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 paying regular dividends to shareholders for the past 14 years. Its dividend yield came in at 15.87%, as of January 14.
As of the close of Q3 2024, 8 hedge funds in Insider Monkey’s database owned stakes in ARMOUR Residential REIT, Inc. (NYSE:ARR), up from 7 in the previous quarter. These stakes are worth nearly $8.2 million in total. Millennium Management was one of the company’s leading stakeholders in Q3.
1. Orchid Island Capital, Inc. (NYSE:ORC)
Dividend Yield as of January 14: 18.62%
Orchid Island Capital, Inc. (NYSE:ORC) is a Florida-based specialty finance company. The company remains optimistic about its future investments, anticipating that attractive opportunities will persist. It expects total returns could improve if the Fed starts to ease monetary policy, particularly if the banking sector becomes more engaged in the Agency RMBS market. Even without these changes, the present investment landscape offers favorable total returns, with hedged net interest spreads effectively supporting the current dividend levels.
Orchid Island Capital, Inc. (NYSE:ORC) has consistently paid monthly dividends to its shareholders since its IPO in 2013, which makes it one of the best monthly dividend stocks with over 5% yield. Starting with cumulative dividends of over $4.6 million in 2013, the company saw this figure rise to more than $81 million by the end of 2023. Throughout this period, it returned around $658 million to shareholders through dividend payments.
Orchid Island Capital, Inc. (NYSE:ORC) currently offers a per-share dividend of $0.12 every month and has a dividend yield of 18.62%.
Orchid Island Capital, Inc. (NYSE:ORC) was a part of 11 hedge fund portfolios at the end of Q3 2024, up from 10 in the previous quarter, according to Insider Monkey’s database. The stakes owned by these hedge funds are worth over $11.7 million collectively.
Overall, Orchid Island Capital, Inc. (NYSE:ORC) ranks first on our list of the best dividend stocks that pay monthly dividends. While we acknowledge the potential for ORC 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 time frame. If you are looking for an AI stock that is more promising than ORC but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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