We recently compiled a list of the 12 Monthly Dividend Stocks with Over 5% Yield. In this article, we are going to take a look at where Gladstone Land Corporation (NASDAQ:LAND) stands against the other dividend stocks.

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.

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).

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.

Overall LAND ranks 11th on our list of the best monthly dividend stocks with over 5% yield. While we acknowledge the potential of LAND as an investment, 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 LAND but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. 

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Disclosure: None. This article is originally published at Insider Monkey.