We recently compiled a list of the 10 Stocks that Pay Dividends Monthly. In this article, we are going to take a look at where LTC Properties, Inc. (NYSE:LTC) stands against the other stocks that pay dividends monthly.
Over the years, dividend stocks have consistently demonstrated resilience in challenging market conditions. While the recent focus on AI might suggest otherwise, the long-term attractiveness of these stocks has increased. Income investors have taken note of this trend, which is reflected in the growing role of dividends as a portion of personal income. According to a report by S&P Dow Jones Indices, the share of dividend income has risen from 2.68% in the fourth quarter of 1980 to 7.88% in the second quarter of 2024, highlighting dividends as a significant source of income. The report also mentioned that since 1936, dividends have contributed to over one-third of the broader market’s total equity returns, with the remaining two-thirds coming from capital appreciation.
This highlights how dividends have become increasingly important over the years. When considering inflation, dividends have outpaced it, suggesting that investors should focus on these stocks. A report by Wisdom Tree noted that from 1957 to 2023, dividends grew by an average of 5.7% annually, which is more than 2% higher than the inflation rate. The report also pointed out that in the last 64 years, dividends only declined in six years, and only once by more than 5%. In contrast, stock prices fell in 18 of those years, with the worst annual decline exceeding 40% and an average drop of over 11%. Stock prices were more than twice as volatile as the dividend cash flows, as short-term prices are more influenced by market sentiment, while long-term value is driven by cash flow stability.
Also read: 10 Highest Paying Monthly Dividend Stocks
When investing in dividend stocks, receiving payments more often is definitely a plus. Although most dividend stocks distribute payments to shareholders on a quarterly basis, there are a few hundred publicly traded companies that opt to pay dividends monthly instead. However, monthly dividend stocks have their downsides. While they offer appealing investment opportunities, their high yields can be misleading, often accompanied by multiple dividend cuts. The high yields are primarily due to the nature of the companies that opt for monthly payments, such as real estate investment trusts (REITs), closed-end funds, business development companies (BDCs), and royalty trusts, which are common among monthly dividend payers. That said, many monthly dividend companies have not only kept up their payouts over the years but have also increased them, all while maintaining high yields.
Once the risks associated with high yields are addressed, investors can concentrate on the benefits of compounding. Monthly dividend stocks provide cash to investors more frequently than other stocks, allowing them to reinvest it sooner and take advantage of faster compounding. Since 1960, 85% of the cumulative total return of the broader market Index can be traced back to reinvested dividends and the effects of compounding, as reported by Hartford Funds. With this, we will take a look at some of the best dividend stocks that offer monthly payouts.
Our Methodology:
For this list, we reviewed a list of companies providing monthly dividends to their shareholders. Among these, we specifically chose businesses with robust dividend practices, consistently maintaining their payouts across multiple years. The majority of these selected companies operate within the Real Estate Investment Trust (REIT) sector, as they are required to allocate 90% of their income towards dividends. From that list, we picked 10 stocks with the highest number of hedge fund investors, using Insider Monkey’s Q2 2024 database of 912 hedge funds and their holdings.
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).
An aerial shot of a modern health care property, its front entrance flanked by well-manicured gardens.
LTC Properties, Inc. (NYSE:LTC)
Number of Hedge Fund Holders: 12
LTC Properties, Inc. (NYSE:LTC) is an American real estate investment trust company, headquartered in California. The company invests in senior housing and healthcare facilities through sale-leasebacks. The company’s investment portfolio consists of 194 properties spread across 26 states, managed by 31 operating partners. The portfolio is evenly divided between senior housing and skilled nursing properties, each making up about 50% of the total gross real estate investments. In the second quarter of 2024, it originated a $12.7 million mortgage loan, secured by a skilled nursing and assisted living campus in Texas, which includes 78 units and 104 beds. This five-year, interest-only loan carries a current rate of 9.15%. The investment is structured as an unconsolidated joint venture and is projected to generate approximately $884,000 in revenue in 2024.
LTC Properties, Inc. (NYSE:LTC) has a strong balance sheet, which makes it one of the best dividend stocks that pay monthly dividends. At the end of Q2, it had total liquidity of $189.3 million, which includes $6.2 million in cash, $118.2 million available through its unsecured revolving line of credit, and the potential to raise $64.9 million by issuing common stock under its equity distribution agreements.
LTC Properties, Inc. (NYSE:LTC) has been making regular dividend payments to shareholders since 1992. It currently offers a monthly dividend of $0.19 per share and has a dividend yield of 6.22%, as of August 29.
LTC Properties, Inc. (NYSE:LTC) was a part of 12 hedge fund portfolios at the end of Q2 2024, compared with 13 in the previous quarter, as per Insider Monkey’s database. The stakes held by these funds have a total value of over $47.3 million. Among these hedge funds, Balyasny Asset Management was the company’s leading stakeholder in Q2.
Overall LTC ranks 8th on our list of the stocks that pay dividends monthly. While we acknowledge the potential LTC 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 timeframe. If you are looking for an AI stock that is more promising than LTC 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.