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Investing in regular stocks is a good strategy for an investor looking to capitalize on long-term growth in a company, while dividend stocks also provide a regular source of cash flow. This cash flow can be used to support your cost of living in retirement or to reinvest into your portfolio. This article will highlight some of the best monthly dividend stocks to capitalize on both long-term appreciation and short-term cash flow
|AGNC Investment Corp||AGNC||REIT that buys government-backed mortgages and mortgage-backed securities.|
|Broadmark Realty Capital Inc.||BRMK||Real estate financing company that deploys capital to real estate investors and developers.|
|Ellington Financial Inc.||EFC||REIT that invests in residential and commercial loans and securities.|
|Prospect Capital Corp.||PSEC||Business development company that provides capital to middle market businesses.|
|EPR Properties||EPR||Experiential REIT that invests in long-term leases at properties like movie theaters, museums, and ski resorts.|
|LTC Properties Inc.||LTC||REIT that finances senior housing and healthcare properties.|
|Agree Realty Corp.||ADC||REIT that focuses on essential retail properties such as grocery stores, big box retailers, home improvement stores, and drug stores.|
|Gladstone Commercial Corporation||GOOD||REIT that invests in single-tenant or multi-tenant net leased industrial and office properties.|
|Pembina Pipeline Corporation||PBA||Canadian energy transportation and midstream provider that owns pipelines and facilities that process oil and natural gas|
AGNC Investment Corp. (AGNC)
- Current Price: $9.81
- 12-Month High: $16.03
- 12-Month Low: $7.30
- 1-Year Target: $8.98
- Market Capitalization: $5.608 billion
AGNC Investment Corp. is a real estate investment trust or REIT. Many high dividend stocks are REITs. In exchange for distributing 90% of their taxable to investors, REITs earn certain tax benefits. Because they’re required to pay dividends, REITs are a dependable and reliable source of cash flow.
AGNC buys mortgage-related securities guaranteed by government-sponsored enterprises like Fannie Mae. Government backing makes these securities less riskier than other types of financing options. AGNC investors benefit from a 14.37% dividend yield which pays $0.12 per share each month.
>>Related: How to Invest in Dividend Stocks
Broadmark Realty Capital Inc. (BRMK)
- Current Price: $4.065
- 12-Month High: $9.85
- 12-Month Low: $4.06
- 1-Year Target: $5.00
- Market Capitalization: $540.328 million
Broadmark Realty Capital Inc. is a real estate financing company that works with real estate investors and developers. They use real estate as collateral to deploy capital to developers and investors working on residential and commercial renovation and development projects. To date, they’ve invested $4 billion in more than 2,000 real estate transactions across 30 states. Broadmark has a 20.19% dividend yield which pays out $0.07 per share each month.
Ellington Financial Inc. (EFC)
- Current Price: $13.82
- 12-Month High: $18.13
- 12-Month Low: $10.81
- 1-Year Target: $15.16
- Market Capitalization: $834.055 million
Ellington Financial Inc. is another mortgage REIT that invests in residential and commercial loans and securities. These include a variety of investments ranging from collateralized loans to mortgage-backed securities. They have $10.3 billion assets under management. Ellington has a 12.82% dividend yield and pays $0.15 per share per month.
Prospect Capital Corp. (PSEC)
- Current Price: $7.66
- 12-Month High: $8.95
- 12-Month Low: $6.09
- 1-Year Target: $6.00
- Market Capitalization: $3.044 billion
Prospect Capital Corp. is a business development company that provides capital to middle market businesses. They’ve invested in assets totaling $7.7 billion with $3.8 billion in declared dividends. Prospect Capital has a 9.21% dividend yield which pays $0.06 per share each month.
EPR Properties (EPR)
- Current Price: $40.29
- 12-Month High: $56.38
- 12-Month Low: $34.58
- 1-Year Target: $47.38
- Market Capitalization: $3.023 billion
EPR Properties is an experiential REIT. They invest in long-term leases at properties like movie theaters, museums, and ski resorts. Triple-net leases mean the tenants are responsible for property upkeep rather than EPR. Instead of paying for things like real estate taxes, insurance, and building maintenance, EPR passes it onto the tenant and the cost savings onto the investor. To date, EPR has made $6.6 billion in investments across 356 different properties. EPR has an 8.01% dividend yield that pays $0.275 per share per month.
LTC Properties Inc. (LTC)
- Current Price: $38.04
- 12-Month High: $45.49
- 12-Month Low: $31.36
- 1-Year Target: $40.25
- Market Capitalization: $1.541 billion
LTC Properties is a REIT that finances senior housing and healthcare properties. Approximately 50% of LTC’s portfolio is senior housing while the other 50% is skilled nursing facilities. They provide investments through sale-leasebacks, mortgages, construction, and joint ventures. LTC has a 5.9% dividend yield and pays a dividend of $0.19 per share each month.
Agree Realty Corp. (ADC)
- Current Price: $68.43
- 12-Month High: $80.44
- 12-Month Low: $61.62
- 1-Year Target: $75.97
- Market Capitalization: $6.085 billion
Agree Realty Corp. is a REIT that focuses on essential retail properties such as grocery stores, big box retailers, home improvement stores, and drug stores. These properties are secured with triple-net leases. Agree Realty operates 1,707 properties across the United States. They increased their monthly dividend payment in October 2022. In 2021 Agree switched from quarterly dividend payments to monthly. They now pay $0.24 per share each month, up from $0.234 per share paid out earlier in 2022. Their dividend yield is currently at 4.21%.
Gladstone Commercial Corporation (GOOD)
- Current Price: $18.38
- 12-Month High: $26.13
- 12-Month Low: $15.02
- 1-Year Target: $19.50
- Market Capitalization: $740.918 million
Gladstone Commercial Corporation is a REIT that invests in single-tenant or multi-tenant net leased industrial and office properties. With net leased properties some of the property fees – like real estate taxes – are passed onto the tenants. Gladstone’s investment strategy prioritizes properties in good locations with strong underlying land value. They currently operate in 27 states. Gladstone pays out a monthly dividend of $0.1254 per share and has a yield of 8.004%.
Pembina Pipeline Corporation (PBA)
- Current Price: $35.22
- 12-Month High: $42.74
- 12-Month Low: $28.89
- 1-Year Target: $38.12
- Market Capitalization: $19.546 billion
Pembina Pipeline Corporation is a Canadian energy transportation and midstream provider. They own pipelines and facilities that process oil and natural gas for distribution across North America. Pembina pays a monthly dividend of $0.2175 CAD per share and has a yield rate of 5.51%.
Other Ways to Invest in High Dividend Stocks
Instead of investing in individual high dividend stocks, you can invest in a dividend exchange-traded fund – or ETF – like the Vanguard Real Estate Index Fund ETF (VNQ). This ETF is composed of a number of REITs across a variety of sectors including residential, healthcare, industrial, and hotels and resorts.
When you buy a share of an ETF you are buying into a basket of different REITs. These ETFs typically pay a quarterly dividend that might be even higher than investing in an individual REIT. There is a trade-off though: REIT ETFs come fees. VNQ, for example, has an expense ratio of 0.12%.
Bonds can also be a high dividend yield investment option. Similarly, you can invest in a bond ETF. The Vanguard Total Bond Market ETF (BND) pays a monthly dividend of about $0.16 per share with an expense ratio of 0.03%. If you prefer mutual funds, there is an equivalent mutual fund for bonds as well.
Should You Invest in Monthly Dividend Stocks?
Dividend stocks are a great way for investors to generate passive income. REITs in particular are good passive income generators because they are required to pay out a portion of their revenue to investors. Most of these payments are made in the form of monthly dividends that can be reinvested to grow your portfolio faster than other types of dividend stocks.
One downside to investing in monthly dividend stocks is that the stocks with the highest dividends tend to be concentrated in real estate. Thanks to growth in e-commerce and remote working, a shift in commercial real estate is currently underway. While this hasn’t led to a decrease in dividends posted by many of the REITs listed above, that could change in the near future.
Other assets, like energy infrastructure, are also at risk because of shifting consumer and regulatory expectations around fossil fuels. A move toward a low-carbon economy could result in assets being stranded. While REITs are good for generating monthly income, their long-term viability in certain sectors of the economy is uncertain.
>>Related: Dividend Aristocrats List
Stocks that pay high dividends are a good passive income generator. These stocks put your money to work and help you recuperate your return on investment much quicker than regular equity stocks. The dividends you earn can be used to reinvest or to fund your cost of living.
The best place to find high dividend paying stocks is REITs. These are real estate companies that are required to pay dividends to their investors. This means even when the economy takes a downturn you can still expect to still generate income from these stocks.