Updated on July 6th, 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 49 monthly dividend stocks
- Links to detailed stand-alone analysis on all 49 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 email@example.com.
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: Whitestone REIT (WSR)
#4: TransAlta Renewables (TRSWF)
#3: STAG Industrial (STAG)
#2: SL Green Realty (SLG)
#1: Realty Income (O)
- Detailed Analysis on All Monthly Dividend Stocks
- Performance Through May 2021
- 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: Whitestone REIT (WSR)
Whitestone is a retail REIT that owns about 58 properties with ~5.0 million square feet of gross leasable area, primarily top U.S. markets in Texas and Arizona. Its portfolio is very diversified with about 1,400 tenants. The top 5 industries are restaurant & food service (23% of annual base rent (ABR)), grocery (9%), financial services (9%), salons (8%), and medical & dental (8%).
Source: Investor Presentation
Whitestone reported its first-quarter 2021 results on 05/04/21. For the quarter, the funds from operations (“FFO”) fell 5% to $8.8million. The funds from operations per share also fell ~5% to $0.20 compared to the same quarter a year ago. Occupancy was 88.7% (vs. 89.7% a year ago), while same-store property net operating income (SSNOI) declined 4.3%.
Notably, WSR’s same-store NOI growth rate of 3.3% since 2018 was better than the peer average of 1.8%. In February 2021, the company raised its quarterly dividend by 2.4% to $0.1075, which translates to a monthly dividend of $0.035833 per share, or an annualized payout of $0.43 per share. We estimate a normalized 2021 FFOPS of $0.90.
Management believes, post-pandemic, investments in acquisitions, re-development, and development projects can drive returns of at least 10%. We would first like to see the SSNOI turn positive, which will likely be helped by a more supportive macro environment post-pandemic. For now, we estimate a FFOPS growth rate of 2% through 2026 on a steady recovery.
Whitestone cut its dividend by 63% in 2020. It looks like it’s ready to steadily increase its dividend to the pre-pandemic levels starting with the recent increase of 2.4%. Currently, the payout ratio at about 50% is sustainable.
Monthly Dividend Stock #4: 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.
TransAlta Renewables reported its first quarter results on May 12th. Renewable energy production dipped to 1,109 GWh compared to 1,173 GWh in the same prior year period. Despite this, revenues of USD $104 million increased 15% year-over-year, in constant currency.
Comparable EBITDA increased 4% while FFO was in-line with the same quarter last year. Cash available for distribution was also identical to the prior year period, at $0.28 per share.
Organic growth is a future catalyst, as well as acquisitions. For example, in the first quarter, the company completed previously announced acquisitions of a 303 megawatt asset portfolio from its parent company, TransAlta Corporation, which includes 274 MW of wind capacity.
For 2021, TransAlta Renewables expects comparable EBITDA between $480 to $520 million, which would represent 8% growth at the midpoint. Meanwhile, AFFO and CAFD are expected to be in-line with 2020 levels due to higher financing expenses.
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 ~4.4%. 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 #3: 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. 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 2021 first quarter, STAG grew core FFO-per-share by 4.3% year-over-year. Core FFO of $79.8 million for the first quarter of 2021 increased 13% from $70.6 million in the year-ago quarter.
STAG Industrial is facing a headwind due to the recession caused by the pandemic. However, the effect of the pandemic on the REIT has been limited so far thanks to the high credit profile of its tenants. It is remarkable that the REIT collected 99.6% of its base rental billings in 2020.
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. The company recently increased its monthly dividend by 0.7%.
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 19.2, which is above our fair value estimate of 15. A declining P/E multiple to 15 over the next five years could reduce annual returns. Still, we expect 5% annual FFO-per-share growth, and the stock has a dividend yield of 3.8%. Total returns are expected at roughly ~7% per year.
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, 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 late April, SLG reported (4/21/2021) financial results for the first quarter of fiscal 2021. Its same–store net operating income decreased–1.4% over the prior year’s quarter but its occupancy rate improved from 93.4% at the end of the previous quarter to 94.2%. Its funds from operations (FFO) per share decreased –17% over the prior year’s quarter, from $2.08 to $1.73, primarily due to asset divestments.
The REIT somewhat improved its collection rates in the quarter, collecting 98.0% of total billings for office, 85.0% of billings for retail and 95.3% of total billings. SLG has been significantly affected by the coronavirus crisis, which has caused a recession and thus has hurt several companies that are tenants of SLG. Occupancy of office space in 10 large cities was just 24% in late March.
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.
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 5.0% 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 $6.50 for 2021, SLG stock trades for a P/FFO ratio of 12.2. This is slightly below our fair value P/FFO ratio of 13. An expanding valuation multiple could boost annual returns over the next five years. In addition to 5% expected annual FFO growth and the 4.6% dividend yield, we expect annualized returns above 10% 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 $25 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 over 100 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.
Source: Investor Presentation
In the most recent quarter, Realty Income beat analyst estimates on both revenue and FFO-per-share. Revenue increased 6.8% from the same quarter last year, due to property acquisitions and rent increases. Adjusted FFO-per-share declined 2.2% due to a higher share count.
Future growth remains likely, as the company’s acquisition pipeline is robust. Last quarter, Realty Income invested $1.03 billion in properties and properties under development or expansion, including $403 million in U.K. properties.
The stock trades for a P/FFO ratio of 19.7, based on our estimate of $3.47 for 2021 FFO-per-share. Our fair value estimate is a P/FFO ratio of 18, which means the stock is slightly overvalued. Offsetting the valuation headwind will be expected FFO-per-share growth of 4.0% and the current dividend yield of 4.2% leading to total expected returns of about 7% per year.
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.
- Agree Realty (ADC) | [6/3/21]
- AGNC Investment (AGNC) | [5/8/21]
- ARMOUR Residential REIT (ARR) | [5/15/21]
- Grupo Aval Acciones y Valores (AVAL)| [4/11/21]
- Banco Bradesco S.A. (BBD) | [5/10/21]
- Broadmark Realty Capital (BRMK) | [5/11/21]
- Chatham Lodging (CLDT)* | [5/18/21]
- Choice Properties REIT (PPRQF) | [5/10/21]
- Chorus Aviation (CHRRF) | [5/18/21]
- Cross Timbers Royalty Trust (CRT) | [5/27/21]
- Dream Industrial REIT (DREUF) | [5/17/21]
- Dream Office REIT (DRETF) | [5/20/21]
- Dynex Capital (DX) | [5/8/21]
- Ellington Financial (EFC) | [5/7/21]
- Eagle Point Income Company (EIC) | [5/19/21]
- EPR Properties (EPR)* | [6/1/21]
- Exchange Income Corporation (EIFZF) | [5/14/21]
- Gladstone Capital Corporation (GLAD) | [5/15/21]
- Gladstone Commercial Corporation (GOOD) | [5/29/21]
- Gladstone Investment Corporation (GAIN) | [5/15/21]
- Gladstone Land Corporation (LAND) | [6/1/21]
- Global Water Resources (GWRS) | [5/16/21]
- Granite Real Estate Investment Trust (GRP.U)** | [Historical Reports]
- Horizon Technology Finance (HRZN) | [5/16/2021]
- Inter Pipeline (IPPLF) | [5/30/21]
- Itau Unibanco (ITUB) | [5/26/21]
- LTC Properties (LTC) | [5/13/21]
- Main Street Capital (MAIN) | [5/10/21]
- Orchid Island Capital (ORC) | [5/10/21]
- Oxford Square Capital (OXSQ) | [5/16/21]
- Pembina Pipeline (PBA) | [6/4/21]
- Permian Basin Royalty Trust (PBT) | [5/27/21]
- Pennant Park Floating Rate (PFLT) | [5/20/21]
- PermRock Royalty Trust (PRT) | [4/8/21]
- Prospect Capital Corporation (PSEC) | [5/21/21]
- Permianville Royalty Trust (PVL)*
- Realty Income (O) | [5/11/21]
- Sabine Royalty Trust (SBR) | [5/27/21]
- Stellus Capital Investment Corp. (SCM) | [6/4/21]
- San Juan Basin Royalty Trust (SJT)*
- Shaw Communications (SJR) | [4/19/21]
- SL Green Realty Corp. (SLG) | [4/27/21]
- Solar Senior Capital (SUNS) | [5/6/21]
- Stag Industrial (STAG) | [5/13/21]
- Superior Plus (SUUIF) | [5/14/21]
- Transalta Renewables (TRSWF) | [5/17/21]
- U.S. Global Investors (GROW) | [5/20/21]
- Vermilion Energy (VET) | [5/19/21]
- Whitestone REIT (WSR) | [6/7/21]
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 June 2021
In June 2021, a basket of the 49 monthly dividend stocks above (excluding SJT) generated positive total returns of 2.1%. For comparison, the Russell 2000 ETF (IWM) generated positive total returns of 1.9% 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 out-performed in June. We will update our performance section monthly to track future monthly dividend stock returns.
In June 2021, the 3 best-performing monthly dividend stocks (including dividends) were:
- Permian Basin Royalty Trust (PBT), up 31.4%
- Mesa Royalty Trust (MTR), up 22.0%
- Cross Timbers Royalty Trust (CRT), up 21.5%
The 3 worst-performing monthly dividend stocks (including dividends) in June were:
- AGNC Investment Corp. (AGNC), down 8.3%
- Orchid Island Capital Inc. (ORC), down 4.0%
- ARMOUR Residential REIT (ARR), down 4.0%
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.