In this article, we discuss 10 best stocks that pay monthly dividends.
Investing in dividend stocks was profitable last year when the Federal Reserve began raising interest rates. However, in 2023, being a dividend stock investor hasn’t been as enjoyable. The S&P 500 Dividend Aristocrat Index, which tracks the performance of companies that have raised their payouts for 25 consecutive years or more, is down 4.29% this year so far, underperforming the broader market by a wide margin. However, analysts don’t see this year as being as bad for dividend stocks as last year was for tech stocks. Dan Lefkovitz, a strategist with Morningstar’s indexes team, spoke about various investment options in his recent interview. Here are some comments from the analyst:
“This has been a struggle for dividend payers. It’s been a narrow market this year, led by the Magnificent Seven and by growth stocks and the theme of artificial intelligence. It hasn’t been a disaster for dividend payers, but it hasn’t been a particularly good year.”
In light of analysts’ opinions and past performance, investors are considering a shift toward dividend stocks as a way to stay financially secure during uncertain periods. Dividend growth stocks are particularly favorable in this investment approach. According to a report by T. Rowe Price, companies that consistently increase their dividends tend to perform well even in declining or stagnant markets. They also capture a significant portion of gains in all but the strongest bull markets. Over a more extended period, sticking with a dividend growth strategy can help increase investment returns through compounding. Some of the best dividend stocks that have raised their dividends for decades include The Procter & Gamble Company (NYSE:PG), Colgate-Palmolive Company (NYSE:CL), and PepsiCo, Inc. (NASDAQ:PEP). These companies have always demonstrated strong financial health and a commitment to returning value to their shareholders.
We have also reported the performance of dividend stocks during inflationary periods in our article, 25 Things Every Dividend Investor Should Know. In this article, we referred to BlackRock’s report and mentioned that not only did dividend stocks provide good returns during times of high inflation, but the growth in dividends from these companies has also exceeded the rate of inflation over the years. For instance, from 1971 to 2021, US companies increased their dividends by 3.7% annually, compared to a 2% yearly increase in inflation. We also took into account Wisdom Tree’s report which showed that S&P 500 dividends grew by 5.73% between 1957 and 2022, outpacing the 3.68% annual growth in inflation over the same period.
When investing in dividend stocks, investors often pay attention to dividend frequencies, as they can impact an investor’s income stream and overall investment strategy. In addition to annual, quarterly, and semi-annual dividends, many companies pay dividends on a monthly basis. Monthly dividends can provide more frequent income for investors who need it for living expenses or other financial obligations. In this article, we will discuss some of the best dividend stocks that pay monthly dividends to shareholders.
Image by Sergei Tokmakov Terms.Law from Pixabay
Our Methodology:
We scanned the database of 910 hedge funds by Insider Monkey as of the second quarter of 2023, and we selected companies that make monthly dividend payments to their shareholders. Most of these companies are part of the real estate investment trust (REIT) sector because REITs are required to distribute at least 90% of their income as dividends. From that list, we picked 10 dividend stocks with the highest hedge fund investors having stakes in them as of Q2 2023.
Best Stocks That Pay Monthly Dividends
10. LTC Properties, Inc. (NYSE:LTC)
Number of Hedge Fund Holders: 8
LTC Properties, Inc. (NYSE:LTC) is an American real estate investment trust company that primarily focuses on investing in and managing properties related to healthcare and senior living. The company also owns and manages skilled nursing facilities, which offer specialized medical care and rehabilitation services for patients who require more intensive healthcare support.
On October 2, LTC Properties, Inc. declared a monthly dividend of $0.19 per share, which was in line with its previous dividend. The stock has a dividend yield of 7.06%, as of October 19. LTC can be a part of dividend portfolios alongside some of the best dividend stocks such as The Procter & Gamble Company, Colgate-Palmolive Company, and PepsiCo, Inc..
In the second quarter of 2023, LTC Properties, Inc. reported revenue of $48.2 million, which showed a 12.2% growth from the same period last year. The company’s cash position also remained strong as it ended the quarter with over $7 million available in cash and cash equivalents.
At the end of Q2 2023, 8 hedge funds in Insider Monkey’s database reported having stakes in LTC Properties, Inc., compared with 10 in the previous quarter. The consolidated value of these stakes is over $7.4 million. Among these hedge funds, Marshall Wace LLP was the company’s leading stakeholder in Q2.
9. Dynex Capital, Inc. (NYSE:DX)
Number of Hedge Fund Holders: 12
Dynex Capital, Inc. (NYSE:DX) is a real estate investment trust company that specializes in investing in mortgage-related and fixed-income securities. The company employs various strategies to manage interest rate risk and credit risk associated with its portfolio.
Dynex Capital, Inc. is one of the best dividend stocks on our list as it has been making regular dividend payments to shareholders since 2008. It currently pays a monthly dividend of $0.13 per share and has a dividend yield of 14.08%, as recorded on October 19.
As of the end of Q2 2023, 12 hedge funds owned stakes in Dynex Capital, Inc., up from 11 a quarter earlier, as per Insider Monkey’s database. The collective value of these stakes is over $57.7 million. With over 1.7 million shares, Balyasny Asset Management was the company’s leading stakeholder in Q2.
8. Main Street Capital Corporation (NYSE:MAIN)
Number of Hedge Fund Holders: 12
Main Street Capital Corporation (NYSE:MAIN) is an American business development company that specializes in providing financing and investment solutions to small and middle-market companies. The company makes equity investments in private companies, often taking a minority ownership stake in these businesses. This allows Main Street Capital to share in the potential success and growth of the companies it invests in.
In the second quarter of 2023, Main Street Capital Corporation reported a total investment income of $127.6 million, which showed a roughly 50% growth from the same period last year. At the end of the quarter, the company had over $70.8 million available in cash and cash equivalents, up from $49.1 million six months ago.
Main Street Capital Corporation has a strong history of paying dividends to shareholders. The company has been paying regular dividends to shareholders since 2007 and also offers regular supplemental dividends. It currently pays a monthly dividend of $0.235 per share and has a dividend yield of 7.04%, as of October 19.
7. Apple Hospitality REIT, Inc. (NYSE:APLE)
Number of Hedge Fund Holders: 17
An American real estate investment trust company, Apple Hospitality REIT, Inc. (NYSE:APLE) primarily focuses on investing in and owning a portfolio of upscale, select-service hotels. These hotels fall into the select-service category, which means they offer limited amenities and services compared to full-service hotels but provide comfortable accommodations for travelers.
On October 18, Apple Hospitality REIT, Inc. declared a monthly dividend of $0.08 per share, which was consistent with its previous dividend. Though the company temporarily suspended its dividends during the pandemic of 2020, it has been making uninterrupted dividend payments to shareholders since 2015. With a dividend yield of 5.94% as of October 19, APLE is one of the best dividend stocks on our list.
Apple Hospitality REIT, Inc. was a part of 17 hedge fund portfolios at the end of Q2 2023, compared with 18 in the previous quarter, according to Insider Monkey’s database. The stakes owned by these hedge funds have a collective value of $62.6 million. Israel Englander’s Millennium Management was the company’s largest stakeholder in Q2.
6. AGNC Investment Corp. (NASDAQ:AGNC)
Number of Hedge Fund Holders: 18
AGNC Investment Corp. (NASDAQ:AGNC) is an American real estate investment trust company that primarily focuses on investing in and managing a portfolio of residential mortgage-backed securities (RMBS) and related investments. The company’s portfolio consists of both fixed-rate and adjustable-rate mortgages.
AGNC Investment Corp. started paying dividends in 2008 and has paid regular dividends to shareholders since then, which makes it 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 16.97%, as of October 19.
In addition to AGNC, investors are also bullish on The Procter & Gamble Company, Colgate-Palmolive Company, and PepsiCo, Inc..
As of the end of Q2 2023, 19 hedge funds in Insider Monkey’s database owned stakes in AGNC Investment Corp., down from 24 in the previous quarter. These stakes have a collective value of over $102.4 million. Ken Griffin and Israel Englander were some of the company’s leading stakeholders in Q2.
5. EPR Properties (NYSE:EPR)
Number of Hedge Fund Holders: 19
EPR Properties (NYSE:EPR) is a Missouri-based real estate investment trust company that specializes in investing in and owning properties in various entertainment, recreation, and education sectors. The company offers a monthly dividend of $0.275 per share and has a dividend yield of 8.02%, as of October 19. It has been making regular dividend payments to shareholders since 1997, which makes it one of the best dividend stocks on our list.
The number of hedge funds in Insider Monkey’s database owning stakes in EPR Properties stood at 19 in Q2 2023, which remained unchanged from the previous quarter. The collective value of stakes owned by these hedge funds is over $208 million.
4. SL Green Realty Corp. (NYSE:SLG)
Number of Hedge Fund Holders: 22
SL Green Realty Corp. (NYSE:SLG) primarily focuses on the acquisition, ownership, management, and development of commercial real estate properties, particularly in the New York City metropolitan area. The REIT offers a monthly dividend of $0.2708 per share for a dividend yield of 10.18%, as recorded on October 19. It is one of the best dividend stocks on our list as the company has been paying regular dividends to shareholders for the past 25 years.
With a total stake value of roughly $154 million, 22 hedge funds in Insider Monkey’s database owned positions in SL Green Realty Corp. at the end of Q2 2023. In the previous quarter, 21 hedge funds held stakes in the company.
3. STAG Industrial, Inc. (NYSE:STAG)
Number of Hedge Fund Holders: 23
STAG Industrial, Inc. (NYSE:STAG) is an American real estate investment trust company that invests in industrial properties throughout the country. It is one of the best dividend stocks on our list as the company has been growing its dividends for 11 consecutive years. The company pays a monthly dividend of $0.1225 per share and offers a dividend yield of 4.47%, as of October 19.
The number of hedge funds tracked by Insider Monkey owning stakes in STAG Industrial, Inc. jumped to 23 in Q2 2023, from 15 in the previous quarter. These stakes are worth over $137.8 million in total.
2. Realty Income Corporation (NYSE:O)
Number of Hedge Fund Holders: 24
Realty Income Corporation (NYSE:O) is next on our list of the best dividend stocks that pay monthly dividends to shareholders. The REIT is a dividend aristocrat with 29 consecutive years of dividend growth under its belt. It currently pays a monthly dividend of $0.256 per share and has a dividend yield of 6.22%, as of October 19.
At the end of Q2 2023, 24 hedge funds in Insider Monkey’s database, growing from 22 in the previous quarter, owned stakes in Realty Income Corporation. Their collective stake value is over $243.6 million.
1. Agree Realty Corporation (NYSE:ADC)
Number of Hedge Fund Holders: 29
Agree Realty Corporation (NYSE:ADC) specializes in owning, acquiring, and developing retail and commercial properties, primarily in the US. The company has a 13-year run of consistently growing its dividends, which makes it one of the best dividend stocks with monthly payouts. It pays a per-share dividend of $0.247 every month, having raised it by 3% on October 12. The stock’s dividend yield on October 19 came in at 5.40%.
Out of 910 hedge funds tracked by Insider Monkey, 29 elite funds had stakes in Agree Realty Corporation at the end of Q2 2023, up from 22 in the previous quarter. These stakes are worth $418.7 million in total.
You can also have a look at 13 Best Mid-Cap Value Stocks to Buy Now and 13 Best Video Surveillance and Private Security Stocks to Buy
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This article is originally published at Insider Monkey.
