Updated on May 6th, 2020 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 57 monthly dividend stocks
- Links to detailed stand-alone analysis on all 57 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. We have also updated the article to remove EPR Properties (EPR) from the list due to the company’s recent decision to suspend its distribution.
Table of Contents
- How to Use the Monthly Dividend Stocks Spreadsheet to Find Dividend Investment Ideas
- The 5 Best Monthly Dividend Stocks
#5: STAG Industrial (STAG)
#4: Main Street Capital (MAIN)
#3: Shaw Communications (SJR)
#2: TransAlta Renewables (TRSWF)
#1: Realty Income (O)
- Detailed Analysis on All of The Monthly Dividend Stocks
- Performance Through April 2020
- Why Monthly Dividends Matter
- The Dangers of Investing in Monthly Dividend Stocks
- Final Thoughts
You can learn more about 5 of our favorite monthly dividend stocks in the following video.
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.
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: STAG Industrial (STAG)
STAG Industrial is an owner and operator of industrial real estate. It is focused on single-tenant industrial properties and has 450 buildings across 38 states in the United States. STAG Industrial went public in 2011 and has a market capitalization of $5.0 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 33% 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 mid-February, STAG Industrial reported (2/12/20) financial results for the fourth quarter of fiscal 2019. The report was very similar to the previous two reports. Core FFO grew 25% over prior year’s quarter thanks to the strength of the industrial market. However, core FFO per share rose only 2% due to extensive issuance of new units. Net operating income grew 22% over prior year’s quarter. During the quarter, the REIT acquired 23 buildings for $456 million at an average capitalization rate of 6.1% and achieved an occupancy rate of 95.0%.
STAG Industrial has grown its FFO at a 5.7% average annual rate in the last seven years. We expect 6% 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 13.2, below our fair value estimate of 15. An expanding P/FFO multiple could boost annual returns by 2.6% per year. In addition, we expect 6% annual FFO-per-share growth, while the stock has a high yield of 5.7%. Total returns are expected to exceed 14% per year through 2025.
Monthly Dividend Stock #4: Main Street Capital (MAIN)
Main Street Capital Corporation is a Business Development Company (BDC) that provides long-term debt and equity capital to lower middle market companies and debt capital to middle market companies. Main Street defines lower middle market companies as generally having annual revenues between $10 million and $150 million. The company’s investments typically support management buyouts, recapitalizations, growth financings, refinancing and acquisitions.
As of the end of fiscal 2019, Main Street had an interest in 69 lower middle market companies, 51 middle market companies and 65 private loan investments. The company has a market capitalization of $1.42 billion and generated $157 million in net investment income last year.
Main Street has a diversified investment portfolio.
Source: Investor Presentation
On February 27th, Main Street Capital released fourth quarter and full year results for 2019. Net investment income of $39.2 million for the quarter was a 6.7% decrease compared to $42.1 million a year ago. The corporation generated net investment income per share of $0.62, down 10% from last year’s income of $0.69. Distributable net investment income totaled $0.66 per share, down 8% from $0.72 in the fourth quarter of 2018.
For the fiscal year, net investment income totaled $157.4 million, up only 0.5% from $156.6 million in 2018. Distributable net investment income per share of $2.66 declined 3.6% from the $2.76 generated in 2018. Main Street’s net asset value also decreased from last year. From $24.09 net asset value per share in 2018, MAIN dropped to $23.91. This represents a total net asset value of $1.54 billion, which the company is currently trading below with a market cap of $1.42 billion.
Main Street has put together a solid record in the past decade. From 2010 through 2019, Main Street was able to grow net investment income by an average compound rate of 8.9% per year. The company has (for now) maintained its monthly dividend at a rate of $0.205 per share, which works out to $2.46 annually. Main Street has an attractive yield of 10%.
In addition, we expect 2% annual distributable net investment income growth, and a modest tailwind from a rising valuation multiple. Overall, we see the potential for 14% annual returns over the next five years for Main Street stock.
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.
Source: Investor Presentation
Shaw reported second quarter results on January 13th and reported 3.7% revenue growth and 9.5% adjusted EBITDA growth. Net income rose 8.4% from the same quarter a year ago. Growth was due to customer additions of approximately 54,000 net postpaid customers. Average billings per user rose 6.8%, and average revenue per user rose 3.1%.
Future growth is likely due to continued roll-out of services. In fiscal 2019, Freedom mobile launched 19 new wireless markets to cover an additional population of 1.4 million Canadians; increasing their total footprint to cover approximately 18 million Canadians, or nearly half the population.
Shaw withdrew its full-year guidance after reporting second-quarter earnings, but importantly the company maintained its monthly dividend. The company is raising cash to get it through the coronavirus crisis, including a debt raise of $500 million in Canadian dollars.
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 $0.84 per share. Shaw has a current yield of 5.2%. While Shaw is not the highest dividend yield around, it makes up for this in terms of sustainability. 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: 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. Its portfolio consists of ~44 facilities powered by wind, natural gas, hydro, or solar. It generates about 43% of cash flow from natural gas (half from Canada and half from Australia) and 51% from wind.
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.
TransAlta pays a monthly dividend of $0.0783 per share in Canadian dollars. In terms of U.S. dollars, the annualized dividend payout of $0.67 per share represents a strong yield of 6.5%. 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. It has a net-debt-to-EBITDA ratio of 2.2x, indicating a manageable level of debt.
Monthly Dividend Stock #1: Realty Income (O)
Realty Income is a retail-focused REIT that owns more than 4,000 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 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 598 consecutive monthly dividend payments without interruption, and has increased its dividend 106 times since its initial public offering in 1994. Realty Income is a member of the Dividend Aristocrats.
Source: Investor Infographic
Previously, Realty Income stock did not make our list of top monthly dividend stocks due to its persistently high valuation. But in times of crisis, when so many companies are cutting or suspending their dividends, Realty Income’s relative safety becomes even more important. And, as Realty Income stock has declined 37% year-to-date, this has had the effect of lowering its valuation multiple to an attractive level, and also pushing up the dividend yield to over 6%.
Realty Income announced its fourth quarter earnings results on February 19. The trust reported that it generated revenues of $398 million during the quarter, which was 16% more than the revenues that Realty Income generated during the previous year’s quarter. Realty Income’s rents at existing properties were responsible for some of the growth in the trust’s top line, but investments into new properties were an even larger factor for increased rent generation. Funds-from-operations-per-share grew by 9% year-over-year, as its funds-from-operations-per-share came in at $0.86 during the fourth quarter.
The company once again showed its strength in the 2020 first quarter, with 7.3% growth in adjusted FFO-per-share. Realty Income invested $486 million in 65 properties and properties under development or expansion in the most recent quarter.
We currently expect Realty Income to generate adjusted FFO-per-share of $3.53 for 2020. Although this forecast may change given the recent closure of many retail locations across the country, the stock trades for a P/FFO ratio of 14.4 based on this. Our fair value estimate is a P/FFO ratio of 18, which means valuation multiple expansion could boost annual returns by 4.6% per year through 2025.
In addition, expected FFO-per-share growth of 5.0% and the current dividend yield of 5.5% lead to total expected returns above 15% per year over the next five years. Realty Income is the top REIT pick, not just because of a high rate of expected return, but also a uniquely high level of dividend safety among the monthly dividend stocks.
Detailed Analysis On All of The Monthly Dividend Stocks
You can see detailed analysis on every monthly dividend security 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.
- AGNC Investment (AGNC) | [3/25/20]
- Alaris Royalty (ALARF)| [3/10/20]
- Apple Hospitality REIT (APLE) | [3/25/20]
- ARMOUR Residential REIT (ARR) | [3/25/20]
- Capitala Finance Corporation (CPTA) | [3/25/20]
- Chatham Lodging (CLDT) | [2/26/20]
- Choice Properties REIT (PPRQF) | [4/15/20]
- Chorus Aviation (CHRRF) [2/18/20]
- Cross Timbers Royalty Trust (CRT) | [4/1/20]
- Dream Industrial REIT (DREUF) | [3/23/20]
- Dream Office REIT (DRETF) | [3/26/20]
- Dynex Capital (DX) | [4/17/20]
- Enerplus (ERF) | [2/27/20]
- EPR Properties (EPR) | [3/2/20]
- Exchange Income Corporation (EIFZF)
- Gladstone Capital Corporation (GLAD) | [2/19/20]
- Gladstone Commercial Corporation (GOOD) | [2/19/20]
- Gladstone Investment Corporation (GAIN) | [2/7/20]
- Gladstone Land Corporation (LAND) | [2/21/20]
- Granite Real Estate Investment Trust (GRP) | [3/11/20]
- Harvest Capital Credit Corporation (HCAP)
- Horizon Technology Finance (HRZN)
- Inter Pipeline (IPPLF) | [2/21/20]
- LTC Properties (LTC) | [2/24/20]
- Main Street Capital (MAIN) | [3/29/20]
- Orchid Island Capital (ORC) | [3/31/20]
- Pacific Coast Oil Trust (ROYT) | [10/8/19]
- Pembina Pipeline (PBA) | [3/22/20]
- Pennant Park Floating Rate (PFLT)
- PermRock Royalty Trust (PRT) | [4/22/20]
- Prospect Capital Corporation (PSEC) | [2/19/20]
- Realty Income (O) | [2/22/20]
- Sabine Royalty Trust (SBR) [3/12/20]
- San Juan Basin Royalty Trust (SJT) – [San Juan recently suspended its dividend]
- Shaw Communications (SJR) | [4/27/20]
- Solar Senior Capital (SUNS)
- Stag Industrial (STAG) | [2/13/20]
- Stellus Capital Investment Corporation (SCM) | [3/8/20]
- Superior Plus (SUUIF) | [2/21/20]
- Transalta Renewables (TRSWF) | [3/23/20]
- Vermilion Energy (VET) | [3/22/20]
- Whitestone REIT (WSR) | [3/4/20]
As we do not have coverage of every monthly dividend stock, they are not all included in the list above. 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 April 2020
In April 2020, a basket of the 58 monthly dividend stocks above (excluding SJT) generated positive total returns of 16.7%. For comparison, the Russell 2000 ETF (IWM) generated positive total returns of 13.9% 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 (SJT, GNL) have been excluded as they either eliminated (SJT) or changed (GNL) their dividend to quarterly payments.
Monthly dividend stocks outperformed in April, by just less than 3 percentage points. We will update our performance section monthly to track future monthly dividend stock returns.
In April 2020, the 3 best-performing monthly dividend stocks (including dividends) were:
- Ellington Financial (EFC), up 83.4%
- Enerplus Corp. (ERF), up 83.0%
- U.S. Global Investors (GROW), up 71.5%
The 3 worst-performing monthly dividend stocks (including dividends) in April were:
- PermRock Royalty Trust (PRT), down 24.8%
- Harvest Capital Credit Corp. (HCAP), down 19.3%
- Dream Office REIT (DRETF), down 6.9%
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.