We recently compiled a list of the 11 Best Stocks That Pay Monthly Dividends in 2024. In this article, we are going to take a look at where SL Green Realty Corp. (NYSE:SLG) stands against the other stocks that pay monthly dividends.
Dividend stocks have long been a favorite among investors, regardless of the payout frequency. Companies, however, are deliberate in determining how often to reward their shareholders. Annual and semi-annual dividends might provide larger payouts, but their unpredictability can be challenging for investors. While major firms opt for quarterly payouts due to practicality, some choose monthly distributions, which many investors find attractive for the steady stream of passive income. In addition, a reduction in monthly payouts would have a smaller immediate impact, and receiving dividends monthly is one of the closest alternatives to a regular paycheck, simplifying the management of day-to-day finances. That said, history suggests that companies offering monthly dividends often boast higher yields but may lack consistent dividend policies.
Regardless of market conditions, dividend stocks can be a useful tool for enhancing income and boosting portfolio growth potential. For instance, investors who are years away from retirement often reinvest their dividends to increase returns. According to an estimate by Charles Schwab, a hypothetical $10,000 investment in a broader market at the end of 1993 would have grown to over $182,000 by the end of 2023 if dividends were reinvested, compared to only $102,000 if they had not been reinvested.
Also read: 10 Biggest Dividend Cuts and Suspensions of 2024
This means that investors looking to reduce their risk while still maintaining growth potential may want to consider high-quality dividend-paying companies. This approach is favored by Ramona Persaud, manager of Fidelity Equity-Income Fund and Fidelity Global Equity Income Fund. She tends to focus on shares of high-quality firms that offer attractive valuations and strong dividends. Persaud pointed out that falling interest rates can create a favorable environment for dividend stocks, as their yields become more appealing compared to declining bond yields. She also mentioned that lower interest rates may lead to gains across a wider range of stocks, a shift from the past two years when market gains were largely driven by a few large-cap growth stocks. Here are some other comments from the analyst:
“I’m excited that really good companies may get more credit from investors than they have during the wave of glamour stocks. And investors stand to gain from the stocks’ dividend payments.”
Persaud prioritizes stocks with strong balance sheets, high potential returns on investment, and predictable cash flows. Additionally, she seeks out stocks with attractive dividend yields relative to similar companies and the broader market. Monthly dividend stocks also focus on high dividend yields, which can be a key draw. While high yields may sometimes indicate the possibility of dividend cuts or weaker balance sheets, many monthly dividend companies have been increasing their payouts for years and also maintain solid financial health. However, investors should exercise caution when investing in these stocks.
High dividend yields are not inherently negative. Stocks with high yields can still uphold strong dividend policies if their business fundamentals are solid. Many companies with above-average yields have consistently paid and even increased their dividends over time. Research indicated that, in the long run, these stocks often provide superior returns. For instance, a University of Nevada study found that portfolios consisting of the top 10 highest dividend yield stocks from the Dow 30 index outperformed those with medium and low dividend yields between 1987 and 2012. The study also highlighted that investing in high dividend yield stocks can be profitable over the long term, despite potential short-term fluctuations in returns. In view of this, we will take a look at some of the best dividend stocks that pay monthly dividends.
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 11 stocks with the highest number of hedge fund investors, using Insider Monkey’s Q3 2024 database of 900 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).
A wide-angle view of a high-rise office property with the REIT company’s logo in the foreground.
SL Green Realty Corp. (NYSE:SLG)
Number of Hedge Fund Holders: 24
SL Green Realty Corp. (NYSE:SLG) is an American real estate investment trust company that is the largest office landlord in Manhattan. The company specializes in acquiring, managing, and enhancing the value of commercial properties in Manhattan. As of September 30, 2024, SL Green owned interests in 55 buildings, covering a total of 31.8 million square feet. This includes ownership of 28.1 million square feet of Manhattan properties and 2.8 million square feet tied to debt and preferred equity investments. The stock has performed exceptionally well in 2024, surging by over 41% in the past 12 months.
In the third quarter of 2024, SL Green Realty Corp. (NYSE:SLG) reported revenue of $157 million, which showed a 4% growth from the same period last year. The revenue also surpassed analysts’ estimates by $4.29 million. Its same-store cash net operating income (NOI), including the company’s share from unconsolidated joint ventures, rose by 2.9%, while it increased by 0.1% for the first nine months of 2024. As of September 30, 2024, Manhattan’s same-store office occupancy reached 90.1%, including leases signed but not yet started. The company expects this occupancy will rise to 92.5% by December 31, 2024, including those leases.
SL Green Realty Corp. (NYSE:SLG) faced a decline in its dividend last year due to lower occupancy rates during the pandemic. However, with the company now recovering, investors can feel more confident in its steady monthly dividend payments. On December 6, it declared a 3% hike in its monthly dividend to $0.2575 per share. As of December 28, the stock supports a dividend yield of 4.66%.
With a collective stake value of more than $224.6 million, 24 hedge funds held positions in SL Green Realty Corp. (NYSE:SLG) at the end of Q3 2024, according to Insider Monkey’s database. In the previous quarter, 20 funds held investments in the stock.
Overall SLG ranks 3rd on our list of the best stocks that pay monthly dividends in 2024. While we acknowledge the potential of SLG 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 SLG 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.
