Updated on January 5th, 2021 by Bob Ciura
Spreadsheet data updated daily
Monthly dividend stocks are securities that pay a dividend every month instead of quarterly or annually. More frequent dividend payments mean a smoother income stream for investors.
This article includes:
- A free spreadsheet on all 56 monthly dividend stocks
- Links to detailed stand-alone analysis on all 56 monthly dividend stocks
- Several other resources to help you invest in monthly dividend securities for steady income
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:
The downloadable Monthly Dividend Stocks Spreadsheet above contains the following for each stock that pays monthly dividends:
- Dividend yield
- Name and ticker
- Market cap
- Payout ratio
Note: We strive to maintain an accurate list of all monthly dividend payers. There’s no universal source we are aware of for monthly dividend stocks; we curate this list manually. If you know of any stocks that pay monthly dividends that are not on our list, please email firstname.lastname@example.org.
This article also includes our top 5 ranked monthly dividend stocks today, according to expected five-year annual returns. Stocks are further screened based on a qualitative assessment of strength of the business model, growth potential, recession performance, and dividend history.
Based on this, we have excluded oil and gas royalty trusts, due to their high risks which make them unattractive for income investors, in our view.
Table of Contents
- How to Use the Monthly Dividend Stocks Spreadsheet to Find Dividend Investment Ideas
- The 5 Best Monthly Dividend Stocks
#5: TransAlta Renewables (TRSWF)
#4: STAG Industrial (STAG)
#3: Shaw Communications (SJR)
#2: SL Green Realty (SLG)
#1: Realty Income (O)
- Detailed Analysis on All Monthly Dividend Stocks
- Performance Through December 2020
- Why Monthly Dividends Matter
- The Dangers of Investing in Monthly Dividend Stocks
- Final Thoughts
Having the list of monthly dividend stocks along with metrics that matter is a great way to begin creating a monthly passive income stream.
High-yielding monthly dividend payers have a unique mix of characteristics that make them especially suitable for investors seeking current income.
Keep reading this article to learn more about investing in monthly dividend stocks.
How to Use the Monthly Dividend Stocks Sheet to Find Dividend Investment Ideas
For investors that use their dividend stock portfolios to generate passive monthly income, one of the main concerns is the sustainability of the company’s dividend.
A dividend cut indicates one of two things:
- The business isn’t performing well enough to sustain a dividend
- Management is no longer interested in rewarding shareholders with dividends
Either of these should be considered an automatic sign to sell a dividend stock.
Of the two reasons listed above, #1 is more likely to happen. Thus, it is very important to continually monitor the financial feasibility of a company’s dividend.
This is best evaluated by using the payout ratio. The payout ratio is a mathematical expression that shows what percentage of a company’s earnings is distributed to shareholders as dividend payments. A very high payout ratio could indicate that a company’s dividend is in danger of being reduced or eliminated completely.
For readers unfamiliar with Microsoft Excel, this section will show you how to list the stocks in the spreadsheet in order of decreasing payout ratio.
Step 1: Download the monthly dividend stocks excel sheet at the link above.
Step 2: Highlight columns A through H, and go to “Data”, then “Filter”.
Step 3: Click on the ‘filter’ icon at the top of the payout ratio column.
The 5 Best Monthly Dividend Stocks
The following list represents our top 5 monthly dividend stocks right now. Stocks were selected based on their projected total annual returns over the next five years, but also based on a qualitative assessment of business model strength, future growth potential, and dividend sustainability.
Monthly Dividend Stock #5: TransAlta Renewables (TRSWF)
TransAlta Renewables trades on the Toronto Stock Exchange (under the ticker RNW) and on the over the counter market (under the ticker TRSWF). Its history in renewable power generation goes back more than 100 years. In 2013, the company was spun off from TransAlta, who remains a major shareholder in the alternative power generation company.
The company has maintained or increased its dividend every year since 2014, by an average of 4% growth per year. TransAlta Renewables owns 13 hydro facilities, 23 wind farms, 7 natural gas plants, 1 battery asset and 1 solar asset. In total, the company owns directly or through economic interests, an aggregate of over 2,500 megawatts of gross generating capacity in operation.
Source: Investor Presentation
TransAlta earns a place on the list of top monthly dividend stocks, not just because of its high yield, but also because of its future growth potential. TransAlta stands on the forefront of a major growth theme–renewable energy.
2019 was another year of growth for the company. Full year Comparable EBITDA increased $8 million, to $438 million for 2019, mainly due to the inclusion of a full year of results from the Lakeswind wind farm and the Mass Solar facility. Future growth is likely due to the addition of new projects. For example, TransAlta announced that the Big Level and the Antrim wind farms began commercial operation in December 2019.
The company also has performed well to start 2020, especially given the difficult business conditions due to coronavirus. In the 2020 third quarter, revenue increased 6.7% year-over-year, while renewable energy production (GWh) increased to 864 from 706, in the same quarter a year ago. The main drivers of higher comparable EBITDA were improved performance at US Wind farms,Canadian Wind, US Wind and Solar and Australian Gas.
TransAlta pays a monthly dividend of $0.0783 per share in Canadian dollars. In terms of U.S. dollars, the annualized dividend payout of $0.74 per share represents a strong yield of 4.1%. TransAlta is therefore an appealing mix of dividend yield and future growth potential. The dividend appears secure, as the company has a strong financial position.
Monthly Dividend Stock #4: STAG Industrial (STAG)
STAG Industrial is an owner and operator of industrial real estate. It is focused on single-tenant industrial properties and has ~462 buildings across 38 states in the United States. STAG Industrial went public in 2011 and has a market capitalization of ~$4.6 billion. The focus of this REIT on single-tenant properties might create higher risk compared to multi-tenant properties, as the former are either fully occupied or completely vacant.
However, STAG Industrial executes a deep quantitative and qualitative analysis on its tenants. As a result, it has incurred credit losses that have been less than 0.1% of its revenues since its IPO. As per the latest data, 55% of the tenants are publicly rated and 31% of the tenants are rated “investment grade.” The company typically does business with established tenants to reduce risk.
STAG has an added advantage due to the company’s exposure to e-commerce properties, which gives it access to a key growth segment in real estate.
Source: Investor Presentation
In the 2020 third quarter, core FFO of $0.46 per share was flat from the year-ago quarter, while revenue increased 14.5% year-over-year thanks to the combination of new properties and rent increases. Same store cash NOI of $73.5 million increased 0.8% compared to the third quarter of 2019. The company achieved an occupancy rate of 96.3% on the total portfolio while the company collected 98.2% of third quarter base rental billings as of November 5th.
STAG Industrial is now facing a headwind due to the recession caused by the coronavirus. However, the effect of the pandemic on the REIT has been limited so far thanks to the high credit profile of its tenants. If anything, many of its properties have benefited from the coronavirus due to their exposure to e-commerce activity, which explains how STAG Industrial has continued to generate growth.
STAG Industrial has grown its FFO at a 5.7% average annual rate in the last seven years. We expect 5% annual FFO-per-share growth over the next five years, as it operates in a large and growing market. It still has a market share that is less than 1% of its target market. Therefore, it has ample room to continue to grow in the years to come.
STAG shares trade for a price-to-FFO ratio of 16.1, which is slightly above our fair value estimate of 15. A declining P/E multiple to 15 over the next five years would reduce annual returns by 1.4% per year. Still, we expect 5% annual FFO-per-share growth, and the stock has a high yield of 4.7%. Total returns are expected to exceed 8% per year.
Monthly Dividend Stock #3: Shaw Communications (SJR)
Shaw Communications was founded in 1966 as the Capital Cable Television Company. It has since grown to become Western Canada’s leading content and network provider, catering to both consumers and businesses. The company produces about $4.1 billion USD in annual revenue.
Shaw earns a high ranking among monthly dividend stocks, because it possesses a combination of a recession-resistant business model, growth potential, a high dividend yield, and a sustainable dividend payout.
Shaw reported fourth-quarter and full-year results in late October. Quarterly revenue was flat year-over-year, while earnings-per-share of C$0.34 were in-line with estimates. Adjusted EBITDA increased 11% for the quarter, and the full fiscal year. Shaw reported an adjusted EBITDA margin of 44.0% compared with 39.6% in the year-ago period.
Source: Investor Presentation
At the end of the quarter, net debt leverage stood at 2.3x compared to its target leverage range of 2.5x to 3.0x. The company is now stating that they expect to deliver adjusted EBITDA growth in fiscal 2021, along with free cash flow of approximately C$800 million, which supports current dividend levels.
Shaw currently pays an annualized dividend payout of $1.182 per share in Canadian dollars; in U.S. dollars, the stock has a current annual dividend payout of ~$0.93 per share. Shaw has a current yield of 5.2%. Shaw also has a sustainable dividend payout. Shaw has a defensive business model which should continue to generate sufficient cash flow to pay its dividend, even in a recession, as consumers will still use their wireless and cable service.
Monthly Dividend Stock #2: SL Green Realty (SLG)
SL Green is an integrated REIT that is focused on acquiring, managing, and maximizing the value of Manhattan commercial properties. It is Manhattan’s largest office landlord, with a market capitalization of $5 billion, and currently owns 96 buildings totaling 41 million square feet. The company has been adversely affected by the coronavirus pandemic, but there are signs of recovery emerging when it comes to Manhattan office and retail real estate.
Source: Investor Presentation
In the 2020 third quarter, SLG grew its same-store net operating income by 2% over last year’s quarter but its occupancy rate dipped from 95.0% to 94.2% and its funds from operations (FFO) per share remained flat at $1.75. In the quarter, the REIT collected 96.9% of total billings for office, 70.0% of billings for retail and 92.6% of total billings. These figures somewhat decreased in the first 20 days of October, as SLG collected 90.3% of total billings.
SLG has been significantly affected by the coronavirus crisis, which has caused a recession and thus has hurt several tenants. As per the feedback received from its tenants, management expects its office tenants to work from home at a 50% rate in September. However, SLG has observed improved trends lately and expects to achieve funds from operations per share of $6.60-$7.10 this year.
SLG benefits from reliable growth in rental rates in one of the most popular commercial areas in the world, Manhattan. The REIT pursues growth by acquiring attractive properties and raising rental rates in its existing properties. It also signs multi-year contracts (7-15 years) with its tenants in order to secure reliable cash flows. SLG has grown its funds from operations per share at a 4.1% average annual rate in the last decade and at a 3.6% annual rate in the last five years.
Due to the effect of the pandemic on its business, funds from operations have stumbled this year but they have remained fairly resilient. We expect SLG to grow its funds from operations per share at a 3.0% average annual rate over the next five years.
Thanks to its financial strength, the REIT can endure the ongoing crisis and emerge stronger whenever the pandemic subsides. It can also maintain its dividend, which is well-covered with a healthy payout ratio. SLG recently raised its dividend by 2.8%, and also announced a special dividend of $1.6967 per share, due to its asset dispositions in 2020.
Based on expected FFO-per-share of $6.90 for 2020, SLG stock trades for a P/FFO ratio of 8.2. This is significantly below our fair value P/FFO ratio of 13. An expanding valuation multiple could boost annual returns by 9.7% per year over the next five years. In addition to 3% expected annual FFO growth and the 6.4% dividend yield, we expect annualized returns above 19% per year over the next five years, albeit with an elevated level of risk due to its exposure to Manhattan office space.
Monthly Dividend Stock #1: Realty Income (O)
Realty Income is a retail-focused REIT that owns more than 6,500 properties. Realty Income owns retail properties that are not part of a wider retail development (such as a mall), but instead are standalone properties. This means that the properties are viable for many different tenants, including government services, healthcare services, and entertainment. Realty Income is a large-cap stock with a market capitalization above $21 billion.
Realty Income leaps to the top spot on the list, because of its highly impressive dividend history, which is unmatched among the other monthly dividend stocks. Realty Income has declared over 600 consecutive monthly dividend payments without interruption, and has increased its dividend 107 times since its initial public offering in 1994. Realty Income is a member of the Dividend Aristocrats.
The company’s long history of dividend payments and increases is due to its high-quality business model and diversified property portfolio.
In the 2020 third quarter, AFFO per share fell 2.4% to $0.81 year-over-year. Realty Income collected 86.5% of contractual rent across the total portfolio. AFFO growth was due to a combination of rental increases at existing properties, as well as contributions from new properties.
Realty Income collected 93.1% of contractual rent in the third quarter, an improvement from the previous quarter. Therefore, investors have some reason for hope that the worst is past for Realty Income.
Source: Investor Presentation
We currently expect Realty Income to generate adjusted FFO-per-share of $3.50 for 2020. The stock trades for a P/FFO ratio of 17.2 based on this forecast. Our fair value estimate is a P/FFO ratio of 18, which means the stock is slightly undervalued. An expanding P/FFO multiple could increase annual returns by about 0.9% per year through 2025.
Expected FFO-per-share growth of 4.0% and the current dividend yield of 4.7% lead to total expected returns of about 10% per year, including a slightly negative impact from a declining valuation multiple over the next five years. Realty Income is the top monthly dividend stock, not just because of a high dividend yield, but also its uniquely high level of dividend safety and long history of consistent dividend growth.
Detailed Analysis On All of The Monthly Dividend Stocks
You can see detailed analysis on monthly dividend securities we cover by clicking the links below. We’ve included our most recent Sure Analysis Research Database report update in brackets as well, where applicable.
- American Finance Trust (AFIN)
- AGNC Investment (AGNC) | [11/9/20]
- Apple Hospitality REIT (APLE) | [11/3/20]
- ARMOUR Residential REIT (ARR) | [11/9/20]
- Grupo Aval Acciones y Valores (AVAL)
- Banco Bradesco S.A. (BBD)
- Broadmark Realty Capital (BRMK) | [11/11/20]
- Chatham Lodging (CLDT)* | [11/17/20]
- Choice Properties REIT (PPRQF) | [11/17/20]
- Chorus Aviation (CHRRF) | [11/25/20]
- Colony Credit Real Estate (CLNC)*
- Cross Timbers Royalty Trust (CRT) | [11/18/20]
- Dream Industrial REIT (DREUF) | [11/16/20]
- Dream Office REIT (DRETF) | [11/11/20]
- Dynex Capital (DX) | [11/11/20]
- Ellington Financial (EFC) | [12/8/20]
- Eagle Point Income Company (EIC)
- Enerplus (ERF) | [9/30/20]
- EPR Properties (EPR)* | [12/3/20]
- Exchange Income Corporation (EIFZF) | [11/16/20]
- Grupo Nutresa S.A. (GCHOY)
- Great Elm Capital Corporation (GECC) | [12/16/20]
- Gladstone Capital Corporation (GLAD) | [11/27/20]
- Gladstone Commercial Corporation (GOOD) | [11/23/20]
- Gladstone Investment Corporation (GAIN) | [11/5/20]
- Gladstone Land Corporation (LAND) | [12/3/20]
- Global Water Resources (GWRS) | [11/17/20]
- Gold Resource Corporation (GORO) | [12/5/20]
- Granite Real Estate Investment Trust (GRP.U)** | [Historical Reports]
- Horizon Technology Finance (HRZN) | [11/5/20]
- Inter Pipeline (IPPLF) | [12/13/20]
- Itau Unibanco (ITUB) | [12/7/20]
- LTC Properties (LTC) | [11/2/20]
- Main Street Capital (MAIN) | [11/24/20]
- Mesa Royalty Trust (MTR)*
- Orchid Island Capital (ORC) | [11/11/20]
- Oxford Square Capital (OXSQ) | [10/28/20]
- Pacific Coast Oil Trust (ROYT)* | [10/8/19]
- Pembina Pipeline (PBA) | [11/13/20]
- Permian Basin Royalty Trust (PBT) | [11/19/20]
- Pennant Park Floating Rate (PFLT) | [12/9/20]
- PermRock Royalty Trust (PRT)* | [11/20/20]
- Prospect Capital Corporation (PSEC) | [12/8/20]
- Permianville Royalty Trust (PVL)*
- Realty Income (O) | [11/9/20]
- Sabine Royalty Trust (SBR) [11/18/20]
- San Juan Basin Royalty Trust (SJT)*
- Shaw Communications (SJR) | [11/4/20]
- SL Green Realty Corp. (SLG) | [10/27/20]
- Solar Senior Capital (SUNS) | [12/2/20]
- Stag Industrial (STAG) | [11/10/20]
- Superior Plus (SUUIF) | [11/15/20]
- Transalta Renewables (TRSWF) | [11/17/20]
- U.S. Global Investors (GROW) | [12/16/20]
- Vermilion Energy (VET) | [11/19/20]
- Whitestone REIT (WSR) | [11/28/20]
Note 1: The asterisk (*) denotes a stock that has suspended its dividend. As a result, we have not included the stock in our annual Monthly Dividend Stock In Focus series. We will resume coverage when and if the company in question resumes paying dividends.
Note 2: The (**) denotes a security that is not included by our data provider and is therefore removed from our Sure Analysis research database despite being a monthly paying dividend stock.
As we do not have coverage of every monthly dividend stock, they are not all included in the list above. Note that most of these businesses are either small- or mid-cap companies. You will not see any S&P 500 stocks in this list – it is predominantly populated by members of the Russell 2000 Index or various international stock market indices. Based on the list above, the bulk of monthly dividend paying securities are REITs and BDCs.
Performance Through December 2020
In December 2020, a basket of the 56 monthly dividend stocks above (excluding SJT) generated positive total returns of 2.4%. For comparison, the Russell 2000 ETF (IWM) generated positive total returns of 7.6% for the month.
Notes: Data for performance is from Ycharts. Canadian company performance may be in the company’s home currency. Year-to-date performance does have survivorship bias as some securities have been excluded as they either eliminated their dividends. Global Net Lease (GNL) was also eliminated as it changed its dividend to quarterly payments.
Monthly dividend stocks under-performed in December. We will update our performance section monthly to track future monthly dividend stock returns.
In December 2020, the 3 best-performing monthly dividend stocks (including dividends) were:
- Harvest Capital Credit (HCAP), up 34.6%
- US Global Investors (GROW), up 31.4%
- Enerplus Corp (ERF), up 23.5%
The 3 worst-performing monthly dividend stocks (including dividends) in December were:
- Pacific Coast Oil Trust (ROYTL), down 22.1%
- PermRock Royalty Trust (PRT), down 16.7%
- Choice Aviation (CHRRF), down 13.8%
Why Monthly Dividends Matter
Monthly dividend payments are beneficial for one group of investors in particular – retirees who rely on dividend stocks for income.
With that said, monthly dividend stocks are better under all circumstances (everything else being equal), because they allow for returns to be compounded on a more frequent basis. More frequent compounding results in better total returns, particularly over long periods of time.
Consider the following performance comparison:
Over the long run, monthly compounding generates slightly higher returns over quarterly compounding. Every little bit helps.
With that said, it might not be practical to manually re-invest dividend payments on a monthly basis. It is more feasible to combine monthly dividend stocks with a dividend reinvestment plan to dollar cost average into your favorite dividend stocks.
The last benefit of monthly dividend stocks is that they allow investors to have – on average – more cash on hand to make opportunistic purchases. Having cash isn’t often important, but when it is, it is really, really important.
Case-in-point: Investors who bought a broad basket of stocks at the bottom of the 2008-2009 financial crisis are likely sitting on triple-digit total returns from those purchases today.
The Dangers of Investing In Monthly Dividend Stocks
Monthly dividend stocks have characteristics that make them appealing to do-it-yourself investors looking for a steady stream of income. Typically, these are retirees and people planning for retirement.
Investors should note many monthly dividend stocks are highly speculative. On average, monthly dividend stocks tend to have elevated payout ratios. An elevated payout ratio means there’s less margin for error to continue paying the dividend if business results suffer a temporary (or permanent) decline.
Because of this, we have real concerns that many monthly dividend payers will not be able to continue paying rising dividends in the event of a recession.
Additionally, a high payout ratio means that a company is retaining little money to invest for future growth. This can lead management teams to aggressively leverage their balance sheet, fueling growth with debt. High debt and a high payout ratio is perhaps the most dangerous combination around for a potential future dividend reduction.
With that said, there are a handful of high quality monthly dividend payers around. Chief among them is Realty Income (O). Realty Income has paid increasing dividends (on an annual basis) every year since 1994.
The Realty Income example shows that there are high quality monthly dividend payers around, but they are the exception rather than the norm. We suggest investors do ample due diligence before buying into any monthly dividend payer.
Financial freedom is achieved when your passive investment income exceeds your expenses. But the sequence and timing of your passive income investment’s payments can matter.
Monthly payments make matching portfolio income with expenses easier. Most expenses recur monthly whereas most dividend stocks pay quarterly. Investing in monthly dividend stocks matches the frequency of portfolio income payments with the normal frequency of personal expenses.
Additionally, many monthly dividend payers offer investors high yields. The combination of a monthly dividend payment and a high yield should be especially appealing to income investors.
Related: The Best High Dividend Stocks Now
But not all monthly dividend payers offer the safety that income investors need. A monthly dividend is better than a quarterly dividend, but not if that monthly dividend is reduced soon after you invest. The high payout ratios and shorter histories of most monthly dividend securities mean they tend to have elevated risk levels.
Because of this, we advise investors to look for high quality monthly dividend payers with reasonable payout ratios, trading at fair or better prices.