Updated on November 2nd, 2023 by Bob Ciura
Monthly dividend stocks can be a profitable investment option for those seeking stable income since they provide a regular and continuous stream of cash flow.
Monthly dividends, as opposed to quarterly or annual dividends, allow investors to receive payments more often, which can assist to fund living costs or complement other sources of income. Monthly dividend stocks can also boost returns because investors can reinvest dividends more frequently to increase their wealth over time.
You can see all 80+ monthly dividend stocks here.
You can download our full Excel spreadsheet of all monthly dividend stocks (along with metrics that matter, like dividend yield and payout ratio) by clicking on the link below:
In this article, we look at the 10 monthly dividend stocks from our Sure Analysis Research Database, with the highest 5-year expected total returns.
The stocks have been arranged in ascending order based on their 5-Year Expected Total Returns.
Table of Contents
You can instantly jump to any specific section of the article by using the links below:
- Monthly Dividend Stock #10: Itau Unibanco (ITUB)
- Monthly Dividend Stock #9: Ellington Financial (EFC)
- Monthly Dividend Stock #8: Permianville Royalty Trust (PVL)
- Monthly Dividend Stock #7: Prospect Capital (PSEC)
- Monthly Dividend Stock #6: Ellington Residential Mortgage REIT (EARN)
- Monthly Dividend Stock #5: AGNC Investment Corp (AGNC)
- Monthly Dividend Stock #4: Orchid Island Capital (ORC)
- Monthly Dividend Stock #3:Dream Office REIT (DRETF)
- Monthly Dividend Stock #2: SL Green Realty Corp. (SLG)
- Monthly Dividend Stock #1: ARMOUR Residential REIT Inc (ARR)
Monthly Dividend Stock #10: Itau Unibanco Holding SA (ITUB)
- 5-Year Expected Total Return: 15.7%
- Dividend Yield: 4.7%
Itaú Unibanco Holding S.A. is headquartered in Sao Paulo, Brazil. Itaú is the most prominent financial conglomerate in the Southern Hemisphere, the world’s tenth-largest bank by market value, and the largest Latin American bank by assets and market capitalization. The bank has operations across South America and the United States, Portugal, Switzerland, China, Japan, and more.
On August 8th, 2023, Itaú Unibanco reported second-quarter results for 2023. In Q2 2023, the company’s recurring managerial result was $8.7 billion, up 3.6% from the previous quarter. Return on equity stood at 20.9% consolidated and 21.5% in Brazil. The loan portfolio slightly dipped 0.1% consolidated, but would have risen 1.3% without forex effects.
Click here to download our most recent Sure Analysis report on ITUB (preview of page 1 of 3 shown below):
Monthly Dividend Stock #9: Ellington Financial (EFC)
- 5-Year Expected Total Return: 14.5%
- Dividend Yield: 14.7%
Ellington Financial Inc. acquires and manages mortgage, consumer, corporate, and other related financial assets in the United States. The company acquires and manages residential mortgage–backed securities (RMBS) backed by prime jumbo, Alt–A, manufactured housing, and subprime residential mortgage loans.
Additionally, it manages RMBS, for which the U.S. government guarantees the principal and interest payments. It also provides collateralized loan obligations, mortgage–related and non–mortgage–related derivatives, equity investments in mortgage originators and other strategic investments.
Source: Investor Presentation
On August 7th, 2023, Ellington Financial reported its Q2 results for the period ending June 30th, 2023. Due to the company’s business model, Ellington doesn’t report any revenues. Instead, it records only income. For the quarter, gross interest income came in at $88.1 million, up 1% quarter-over-quarter. Adjusted (previously referred to as “core”) EPS came in at $0.38, seven cents lower versus Q1-2023.
The decline was mainly due to higher professional fees. Ellington’s book value per share fell from $15.10 to $14.70 during the last three months, with its dividends exceeding the underlying income. The monthly dividend remains at $0.15.
Click here to download our most recent Sure Analysis report on Ellington Financial Inc (EFC) (preview of page 1 of 3 shown below):
Monthly Dividend Stock #8: Permianville Royalty Trust (PVL)
- 5-Year Expected Total Return: 14.9%
- Dividend Yield: 16.7%
Permianville Royalty Trust was incorporated in 2011 and is based in Houston, Texas. It operates as a statutory trust and owns a net profits interest representing the right to receive 80% of the net profits from the sale of oil and natural gas production from properties located in the states of Texas, Louisiana and New Mexico.
Permianville Royalty Trust has proved more vulnerable than most royalty trusts to the downturns of the energy market. Over the last eight years, the total production of Permianville Royalty Trust has declined at an average annual rate of 6%. Such a decline rate weighs heavily on future growth prospects. Overall, Permianville Royalty Trust is highly risky and hence investors should consider purchasing it only during severe downturns.
Click here to download our most recent Sure Analysis report on Permianville Royalty Trust (PVL) (preview of page 1 of 3 shown below):
Monthly Dividend Stock #7: Prospect Capital (PSEC)
- 5-Year Expected Total Return: 15.7%
- Dividend Yield: 14.1%
Prospect Capital Corporation is a Business Development Company, or BDC, that provides private debt and private equity to middle–market companies in the U.S. The company focuses on direct lending to owner–operated companies, as well as sponsor–backed transactions.
Prospect invests primarily in first and second lien senior loans and mezzanine debt, with occasional equity investments.
Source: Investor Presentation
Prospect Capital posted fourth quarter and full-year earnings on August 29th, 2023, and results were somewhat weaker than expected. Net investment income was up from the prior quarter and the year-ago quarter, as originations more than doubled. However, results missed consensus estimates. Net investment income for the quarter was $113 million, or 23 cents per share. That missed estimates by a penny, but was up from 21 cents.
Click here to download our most recent Sure Analysis report on PSEC (preview of page 1 of 3 shown below):
Monthly Dividend Stock #6: Ellington Residential Mortgage REIT (EARN)
- 5-Year Expected Total Return: 17.4%
- Dividend Yield: 17.8%
Ellington Residential Mortgage REIT acquires, invests in, and manages residential mortgage and real estate related assets. Ellington focuses primarily on residential mortgage-backed securities, specifically those backed by a U.S. Government agency or U.S. government–sponsored enterprise.
Agency MBS are created and backed by government agencies or enterprises, while non-agency MBS are not guaranteed by the government.
Source: Investor Presentation
On August 10th, 2023, Ellington Residential reported its second quarter results for the period ending June 30th, 2023. The company generated net income of $1.2 million, or $0.09 per share. Ellington achieved adjusted distributable earnings of $2.4 million in the quarter, leading to adjusted earnings of $0.17 per share, which does not cover the dividend paid in the period.
Click here to download our most recent Sure Analysis report on EARN (preview of page 1 of 3 shown below):
Monthly Dividend Stock #5: AGNC Investment Corp (AGNC)
- 5-Year Expected Total Return: 19.5%
- Dividend Yield: 18.6%
American Capital Agency Corp is a mortgage real estate investment trust that invests primarily in agency mortgage–backed securities (or MBS) on a leveraged basis.
The firm’s asset portfolio is comprised of residential mortgage pass–through securities, collateralized mortgage obligations (or CMO), and non–agency MBS. Many of these are guaranteed by government–sponsored enterprises.
Source: Investor Presentation
AGNC reported its Q2 2023 results on July 24th, 2023, reporting a non-GAAP EPS of $0.67, surpassing expectations by $0.04. As of June 30, 2023, the tangible net book value per common share was $9.39. Their investment portfolio amounted to $58.0 billion, consisting of $46.7 billion in Agency MBS, $10.2 billion net TBA mortgage position, and $1.1 billion in credit risk transfer (“CRT”) and non-Agency securities.
The company’s leverage, based on tangible net book value “at risk,” was 7.2x as of June 30, 2023, and the average leverage for the quarter was also 7.2x. Cash and unencumbered Agency MBS totaled $4.3 billion as of June 30, 2023.
Click here to download our most recent Sure Analysis report on AGNC Investment Corp (AGNC) (preview of page 1 of 3 shown below):
Monthly Dividend Stock #4: Orchid Island Capital (ORC)
- 5-Year Expected Total Return: 19.8%
- Dividend Yield: 22.2%
Orchid Island Capital, Inc. is an mortgage REIT that is externally managed by Bimini Advisors LLC and focuses on investing in residential mortgage-backed securities (RMBS), including pass-through and structured agency RMBSs. These financial instruments generate cash flow based on residential loans such as mortgages, subprime, and home-equity loans.
Source: Investor Presentation
Orchid Island has experienced significant earnings volatility recently, with net losses in 2013 and 2018 and several years where profits were minimal. Looking ahead, the book value per share of Orchid Island is expected to recover, although the high payout will likely weaken earnings per share and dividends per share.
Click here to download our most recent Sure Analysis report on Orchid Island Capital, Inc. (ORC) (preview of page 1 of 3 shown below):
Monthly Dividend Stock #3: Dream Office REIT (DRETF)
- 5-Year Expected Total Return: 21.1%
- Dividend Yield: 13.7%
Dream Office REIT acquires and manages predominantly office and industrial properties in major urban areas throughout Canada, with a focus on downtown Toronto. The trust’s portfolio is located primarily in Toronto, Montreal/Ottawa, Mississauga/North York, and Calgary, though it does have small exposure to other markets as well.
Dream Office ownership interests include 5.5 million square feet of gross leasable area from 30 properties, which include 28 office properties, and two properties under development. Dream Office has leases with 500 tenants across Canada, a few of its larger tenants include: Government of Canada, Government of Ontario and State Street Trust.
Source: Investor Presentation
Dream Office Corporation released its Q2 results on August 3rd, 2023. In the quarter ended June 30, 2023, the diluted FFO per unit decreased by $0.03 to $0.35 compared to $0.38 in Q2 2022. This decline was influenced by a lower share of FFO from the investment in Dream Industrial REIT due to unit sales, reduced net rental income from sold properties, and higher interest expenses.
Comparative properties NOI increased by 3.8%, driven by higher in-place net rents, rent step-ups, and better rates on new leases and renewals.
Click here to download our most recent Sure Analysis report on DRETF (preview of page 1 of 3 shown below):
Monthly Dividend Stock #2: SL Green Realty Corp. (SLG)
- 5-Year Expected Total Return: 23.1%
- Dividend Yield: 11.1%
SL Green is a self-managed REIT that manages, acquires, develops, and leases New York City Metropolitan office properties. In fact, the trust is the largest owner of office real estate in New York City, with the majority of its properties located in midtown Manhattan. It is Manhattan’s largest office landlord, with 60 buildings totaling about 33 million square feet.
Source: Investor Presentation
In mid-October, SLG reported (10/18/2023) financial results for the third quarter of fiscal 2023. Its same-store net operating income grew 10.4% over the prior year’s quarter and its occupancy rate edged up sequentially from 89.8% to 89.9%. However, due to some assets sales and higher interest expense, funds from operations (FFO) per share fell -23% over the prior year’s quarter, from $1.66 to $1.27, though they exceeded the analysts’ consensus by $0.01.
Click here to download our most recent Sure Analysis report on SL Green Realty Corp. (SLG) (preview of page 1 of 3 shown below):
Monthly Dividend Stock #1: ARMOUR Residential REIT Inc (ARR)
- 5-Year Expected Total Return: 31.2%
- Dividend Yield: 31.7%
As an mREIT, ARMOUR Residential invests in residential mortgage-backed securities that include U.S. Government-sponsored entities (GSE) such as Fannie Mae and Freddie Mac. It also includes Ginnie Mae, the Government National Mortgage Administration’s issued or guaranteed securities backed by fixed-rate, hybrid adjustable-rate, and adjustable-rate home loans.
Unsecured notes and bonds issued by the GSE and the US Treasury, money market instruments, and non-GSE or government agency-backed securities are examples of other types of investments.
Source: Investor Presentation
ARMOUR reported Q2 results on July 26th, 2023. The company reported a non-GAAP EPS of $0.23, missing expectations by $0.03. The net interest income was $5.8 million, with an asset yield of 4.24% and a net cost of funds of 2.49%, resulting in a net interest margin of 1.75%. The company paid common stock dividends of $0.08 per share per month.
Click here to download our most recent Sure Analysis report on ARMOUR Residential REIT Inc (ARR) (preview of page 1 of 3 shown below):
Final Thoughts
Monthly dividend stocks might be an appealing option for investors looking for a consistent income stream, whether for meeting daily needs or regular compounding. While no investment is risk-free, some monthly dividend stocks have a track record of financial stability, steady profitability, and consistent dividend payments.
Our list of the ten best monthly dividend stocks presented in this article includes companies from a variety of industries that rank high based on our 5-year expected total return forecasts.
While all the companies on this list have strong expected total returns, some of them have previously cut their dividend or pay distributions based only on how much they generate annually. Almost all of them have a dividend risk score of F in our Sure Analysis Research Database. As a result, individual investors must perform their due diligence before making investment decisions.
If you are interested in finding high-quality dividend growth stocks and/or other high-yield securities and income securities, the following Sure Dividend resources will be useful:
Monthly Dividend Stock Individual Security Research
- 10 Cheapest Monthly Dividend Stocks
- 10 Safest Monthly Dividend Stocks
- 3 Top ‘Hold Forever’ Monthly Dividend Stocks
Other Sure Dividend Resources
- Dividend Kings: 50+ years of rising dividends
- Dividend Aristocrats: 25+ years of rising dividends and in the S&P 500
- High Dividend Stocks: 4%+ dividend yields