In this article, we will be taking a look at the 12 best stocks that pay monthly dividends.
Dividend investing is a strategy that has long been integrated into investor circles, particularly by those looking to lead a comfortable life well into retirement, for instance. However, just the idea of being able to establish a stable, passive income stream for yourself is enough to tempt one into becoming an income investor. Making more money out of the money you already own is too good of an opportunity to pass up, after all. As such, dividend stocks like The Coca-Cola Company (NYSE: KO), AT&T Inc. (NYSE: T), Exxon Mobil Corporation (NYSE: XOM), and Chevron Corporation (NYSE: CVX) are among some of the most popular stock picks among investors today.
Is Dividend Yield Important?
Research has proven that high-yielding stocks tend to outperform their lower-yield counterparts, and even the market at large, for instance. Wellington Management, in a research cited by Hartford Funds, for instance, has estimated that between 1930 and 2020, high-yielding stocks managed to outperform the S&P 500 index 77.8% of the time, or during 7 out of 10 time periods under study.
In comparison to this significant outperformance, stocks with the lowest yields, at least among those under study, only managed to outperform the S&P 500 index about 44.4% of the time during the same period. These observations thus prove two things: first, the dividend stocks generally tend to outperform the market a decent, and sometimes even impressive number of the times; and second, that higher-yielding dividend stocks have historically proven themselves to be better performers than lower-yielding ones.
Photo by Esther Tuttle on Unsplash
Without further ado, let’s take a look at the 12 best stocks that pay monthly dividends.
Our Methodology
We have selected monthly dividend-paying stocks with dividend yields of 2% and above. Insider Monkey tracks the data of about 873 hedge funds, and we have also used this data to pick dividend stocks that are highly popular among hedge funds today. For each stock we have mentioned its yield and the number of hedge funds holding a stake in it, ranking them from the lowest to the highest number of hedge fund holders.
Best Stocks That Pay Monthly Dividends
12. Dynex Capital, Inc. (NYSE: DX)
Number of Hedge Fund Holders: 9
Dividend Yield: 8.78%
Dynex Capital, Inc. (NYSE: DX) is a real estate investment trust (REIT), based in Virginia, US. The company’s subsidiaries include Issued Holdings Capital Corporation, and it ranks 12th on our list of the best stocks that pay monthly dividends.
By the end of the second quarter of 2021, 9 hedge funds out of the 873 tracked by Insider Monkey held stakes in Dynex Capital, Inc. (NYSE: DX) worth roughly $27 million. This is compared to 8 hedge funds in the previous quarter with a total stake value of approximately $24 million.
Like The Coca-Cola Company (NYSE: KO), AT&T Inc. (NYSE: T), Exxon Mobil Corporation (NYSE: XOM), and Chevron Corporation (NYSE: CVX), Dynex Capital, Inc. (NYSE: DX) is a good stock to invest in.
11. LTC Properties, Inc. (NYSE: LTC)
Number of Hedge Fund Holders: 10
Dividend Yield: 6.68%
LTC Properties, Inc. (NYSE: LTC), a healthcare REIT, invests in seniors housing and healthcare properties through sale-leasebacks, mortgage financing, joint ventures, and structured finance solutions including preferred equity and mezzanine lending. The company ranks 11th on our list of best stocks that pay monthly dividends.
By the end of the second quarter of 2021, 10 hedge funds out of the 873 tracked by Insider Monkey held stakes in LTC Properties, Inc. (NYSE: LTC) worth roughly $9 million.
10. Prospect Capital Corporation (NASDAQ: PSEC)
Number of Hedge Fund Holders: 11
Dividend Yield: 8.91%
Prospect Capital Corporation (NASDAQ: PSEC), a business development company, specializes in middle market, mature, mezzanine finance, later stage, emerging growth, and other transactions. The company ranks 10th on our list of the best stocks that pay monthly dividends. It is based in New York.
9. Broadmark Realty Capital Inc. (NYSE: BRMK)
Number of Hedge Fund Holders: 12
Dividend Yield: 7.88%
Broadmark Realty Capital Inc. (NYSE: BRMK) underwrites, funds, services, and manages a portfolio of the short-term and first deed of trust loans to fund the development of residential or commercial properties in the US. The company ranks 9th on our list of the best stocks that pay monthly dividends.
This April, B. Riley’s Matt Howlett began covering shares of Broadmark Realty Capital Inc. (NYSE: BRMK) with a Buy rating and a $12.50 price target.
8. Gladstone Land Corporation (NASDAQ:LAND)
Number of Hedge Fund Holders: 6
Dividend Yield: 2.4%
Gladstone Land Corporation (NASDAQ:LAND), a publicly traded REIT, is next on our list of the best stocks that pay monthly dividends. The company ranks 8th, and acquires and owns farmland in the US to lease properties to third-party farmers.
In the second quarter of 2021, Gladstone Land Corporation (NASDAQ:LAND) had an FFO of $0.13. The company’s revenue was $16.89 million, up 33.67% year over year and beating estimates by $0.28 million.
Like The Coca-Cola Company (NYSE: KO), AT&T Inc. (NYSE: T), Exxon Mobil Corporation (NYSE: XOM), and Chevron Corporation (NYSE: CVX), Gladstone Land Corporation (NASDAQ:LAND) is a notable stock pick among hedge funds.
7. ARMOUR Residential REIT, Inc. (NYSE: ARR)
Number of Hedge Fund Holders: 13
Dividend Yield: 10.98%
ARMOUR Residential REIT, Inc. (NYSE: ARR) is a mortgage REIT that invests in mortgage-backed securities (MBS) in the US. The company ranks 7th on our list of the best stocks that pay monthly dividends and is based in Florida.
B. Riley holds a Neutral rating and an $11.50 price target on shares of ARMOUR Residential REIT, Inc. (NYSE: ARR) as of this July.
In the second quarter of 2021, ARMOUR Residential REIT, Inc. (NYSE: ARR) had an FFO of $0.21, missing estimates by $0.07. The company’s revenue was $16.7 million, beating the previous quarter’s $16.06 million revenue.
6. STAG Industrial, Inc. (NYSE: STAG)
Number of Hedge Fund Holders: 15
Dividend Yield: 3.48%
STAG Industrial, Inc. (NYSE: STAG), a REIT, works to acquire and operate single-tenant, industrial properties throughout the United States. The company ranks 6th on our list of the best stocks that pay monthly dividends and is based in Boston, US.
By the end of the second quarter of 2021, 15 hedge funds out of the 873 tracked by Insider Monkey held stakes in STAG Industrial, Inc. (NYSE: STAG) worth roughly $232 million. This is compared to 17 hedge funds in the previous quarter with a total stake value of approximately $173 million.
5. Agree Realty Corporation (NYSE: ADC)
Number of Hedge Fund Holders: 18
Dividend Yield: 3.52%
Agree Realty Corporation (NYSE: ADC), a publicly traded REIT, works to acquire and develop properties net leased to industry-leading retail tenants. The company ranks 5th on our list of the best stocks that pay monthly dividends.
This August, Mizuho’s Haendel St. Juste raised the price target on shares of Agree Realty Corporation (NYSE: ADC) from $73 to $79. The analyst also reiterated a Neutral rating on the shares.
In the second quarter of 2021, 18 hedge funds out of the 873 tracked by Insider Monkey held stakes in Agree Realty Corporation (NYSE: ADC) worth roughly $187 million. This is compared to 18 hedge funds in the previous quarter with a total stake value of approximately $200 million.
4. AGNC Investment Corp. (NASDAQ: AGNC)
Number of Hedge Fund Holders: 19
Dividend Yield: 8.71%
AGNC Investment Corp. (NASDAQ: AGNC), an American REIT, is next on our list of the best stocks that pay monthly dividends, ranking 4th. The company invests in residential mortgage pass-through securities and collateralized mortgage obligations for which the principal and interest payments are guaranteed by the US government-sponsored enterprise or by the US government agency.
By the end of the second quarter of 2021, 19 hedge funds out of the 873 tracked by Insider Monkey held stakes in AGNC Investment Corp. (NASDAQ: AGNC) worth roughly $151 million. This is compared to 18 hedge funds in the previous quarter with a total stake value of approximately $167 million.
3. SL Green Realty Corp. (NYSE: SLG)
Number of Hedge Fund Holders: 21
Dividend Yield: 5.13%
SL Green Realty Corp. (NYSE: SLG) is an S&P 500 company and is also the largest office REIT in Manhattan. The company is a fully integrated REIT, that acquires, manages, and maximizes the value of Manhattan commercial properties. It ranks 3rd on our list of the best stocks that pay monthly dividends.
Deutsche Bank holds a raised price target of $77, compared to the previous target of $66, on shares of SL Green Realty Corp. (NYSE: SLG) as of this June. The firm also has a Hold rating on the shares.
According to our data, 21 hedge funds out of the 873 tracked by Insider Monkey held stakes in SL Green Realty Corp. (NYSE: SLG) worth roughly $144 million in the second quarter of 2021.
2. Shaw Communications Inc. (NYSE: SJR)
Number of Hedge Fund Holders: 23
Dividend Yield: 3.08%
Shaw Communications Inc. (NYSE: SJR) is a telecommunications company based in Canada. It offers telephone, internet, television, and mobile services to its consumers. The company ranks 2nd on our list of the best stocks that pay monthly dividends.
More hedge funds demonstrated an interest in Shaw Communications Inc. (NYSE: SJR) in the second quarter of 2021, as 23 hedge funds out of the 873 tracked by Insider Monkey held stakes in the company in that quarter, worth roughly $697 million. This is compared to 21 hedge funds in the previous quarter with a total stake value of approximately $384 million.
1. Realty Income Corporation (NYSE: O)
Number of Hedge Fund Holders: 23
Dividend Yield: 3.95%
Realty Income Corporation (NYSE: O), yet another REIT, is next and last on our list of the best stocks that pay monthly dividends, ranking 1st. The company invests in free-standing, single-tenant, commercial properties in the US, Puerto Rico, and the UK. These properties are subject to NNN Leases.
Haendel St. Juste, an analyst at Mizuho, holds a Buy rating on shares of Realty Income Corporation (NYSE: O) as of this August. The analyst also raised his price target on Realty Income Corporation (NYSE: O) shares at the same time, from $77 to $81.
Out of 873 hedge funds tracked by Insider Monkey, 23 hedge funds held stakes in Realty Income Corporation (NYSE: O) worth roughly $221 million in the second quarter of 2021. This is compared to 18 hedge funds in the previous quarter with a total stake value of approximately $183 million.
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Disclosure: None. 12 Best Stocks That Pay Monthly Dividends is originally published on Insider Monkey.
