Article updated June 3rd, 2019 by Ben Reynolds
Spreadsheet data updated weekly on Wednesdays
Monthly dividend stocks are securities that pay a dividend every month, instead of quarterly or annually.
More frequent dividend payments means a smoother income stream for investors.
This article includes:
- A free spreadsheet on all 39 monthly dividend stocks
- Links to detailed stand-alone analysis on all 39 monthly dividend stocks
- Several other resources to help you invest in monthly dividend securities for steady income
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
- Beta
Table of Contents
- How to Use the Monthly Dividend Stocks Spreadsheet to Find Dividend Investment Ideas
- Detailed Analysis on All of The Monthly Dividend Stocks
- Performance Through May 2019
- Why Monthly Dividends Matter
- The Dangers of Investing in Monthly Dividend Stocks
- Final Thoughts
You can learn more about our 5 favorite monthly dividend stocks in the following video.
You can also view financial data on all the stocks in our monthly dividend database below:
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 measure the financial feasibility of a company’s dividend.
This is best measured 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.
Step 4: Filter the high dividend stocks spreadsheet in descending order by payout ratio. This will list the stocks with lower (safer) payout ratios at the top.
Detailed Analysis On All of The Monthly Dividend Stocks
You can see detailed analysis on every monthly dividend security we’ve found by clicking the links below:
- AGNC Investment (AGNC)
- Apple Hospitality REIT (APLE)
- Capitala Finance Corporation (CPTA)
- Chatham Lodging (CLDT)
- Choice Properties REIT (PPRQF)
- Chorus Aviation (CHR.TO)
- Cross Timbers Royalty Trust (CRT)
- Dream Global REIT (DRG.UN.TO)
- Dream Industrial REIT (DIR.UN.TO)
- Dream Office REIT (D.UN.TO)
- Enerplus (ERF)
- EPR Properties (EPR)
- Exchange Income Corporation (EIFZF)
- Gladstone Capital Corporation (GLAD)
- Gladstone Commercial Corporation (GOOD)
- Gladstone Investment Corporation (GAIN)
- Gladstone Land Corporation (LAND)
- Global Net Lease (GNL)
- Granite Real Estate Investment Trust (GRP)
- Harvest Capital Credit Corporation (HCAP)
- Horizon Technology Finance (HRZN)
- Inter Pipeline (IPL.TO)
- LTC Properties (LTC)
- Main Street Capital (MAIN)
- Orchid Island Capital (ORC)
- Pembina Pipeline (PBA)
- Pennant Park Floating Rate (PFLT)
- Prospect Capital Corporation (PSEC)
- Realty Income (O)
- Sabine Royalty Trust (SBR)
- San Juan Basin Royalty Trust (SJT)
- Shaw Communications (SJR)
- Solar Senior Capital (SUNS)
- Stag Industrial (STAG)
- Stellus Capital Investment Corporation (SCM)
- Superior Plus (SPB.TO)
- Transalta Renewables (RNW.TO)
- Vermilion Energy (VET)
- Whitestone REIT (WSR)
Note that all of these businesses are either small- or mid-cap companies. You will not see any S&P 500 stocks in this list – it is instead 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.
Note: You can see our list of all publicly traded REITs here.
Performance Through May 2019
In May 2019, a basket of the 39 monthly dividend stocks above generated total returns of -2.8%. For comparison, the Russell 2000 ETF (IWM) generated total returns of -7.0% over the same time period.
Monthly dividend stocks significantly outperformed in May of 2019. This is likely due to declining interest rates in the month. The 10-Year T-Note yield declined from 2.52% down to 2.14% in May. This should have provided a tailwind for high income securities, like many of the monthly dividend stocks. This boost partially offset general equity market declines.
For fiscal 2019 through May, the basket of 39 monthly dividend stocks has generated total returns of 13.3% versus 9.2% for The Russell 2000 ETF. In the short time period above monthly dividend stocks have also outperformed a reasonable comparison index. We will update our performance section monthly to track future monthly dividend stock returns.
Year-to-date, the best 3 performing monthly dividend stocks (including dividends) are:
- Chorus Aviation, up 34.0%
- Transalta Renewables, up 33.4%
- Exchange Income, up 29.2%
The 3 worst performing monthly dividend stocks (including dividends) year-to-date are:
- San Juan Basin Royalty Trust, down 17.1%
- Enerplus, down 8.0%
- AGNC Investment Corp., down 2.2%
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 dividend (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.
Final Thoughts
Financial freedom is achieved when your passive investment income exceeds your expenses. But the sequence and timing of your passive income investment’s payments matters a great deal.
It’s far harder to receive dividends once a quarter and budget appropriately than it is to have a steady stream of monthly dividend income rolling in.
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 means 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.