Updated August 28th, 2018
The end goal of many dividend investors is to generate enough passive income to cover life’s expenses.
One barrier to this goal is that most dividend-paying stocks deliver their distribution on a quarterly basis. Imagine for a moment if your employer only paid you once per quarter – budgeting would become much more difficult!
One (complicated) solution to this problem is to construct your portfolio so that a roughly equal amount of dividend income is received each month.
This will be high maintenance, though, as some months’ dividends will increase faster than others (since different companies pay dividends in different quarters, and each company will increase its dividend at a different pace). Thus, periodic re-balancing will be necessary if this ‘solution’ is implemented.
A much better way to solve this problem is to invest in stocks that pay monthly dividends. Unfortunately, there are not many monthly dividend stocks, but we have compiled them here for your use.
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
- 5-year beta
You can learn more about these monthly dividend stocks in the following video.
You can also view financial data on all the stocks in our monthly dividend database below:
|Ticker||Name||Price||Dividend Yield||Market Cap ($M)||P/E Ratio||Payout Ratio|
|AGNC||AGNC Investment Corp.||18.73||11.5||8,968.9||7.7||88.3|
|APLE||Apple Hospitality REIT Inc.||17.42||6.9||4,033.4||10.1||69.0|
|CHR.TO||Chorus Aviation Inc.||7.56||6.2||1,044.0||8.3||51.4|
|CJREF||Corus Entertainment Inc.||3.15||29.1||667.2||-1.1||-31.9|
|CLDT||Chatham Lodging Trust (REIT) of Beneficial Interest||20.79||6.3||956.1||10.3||65.5|
|CPTA||Capitala Finance Corp.||8.85||11.2||143.4||8.5||94.9|
|CRT||Cross Timbers Royalty Trust||14.64||10.3||87.1|
|D.UN.TO||Dream Office Real Estate Investment Trust||24.97||4.0||1,495.0||9.5||37.8|
|DIR.UN.TO||Dream Industrial Real Estate Investment Trust||10.37||6.8||1,133.0||10.5||70.7|
|DRG.UN.TO||Dream Global Real Estate Investment Trust||15.15||5.3||2,913.0||5.8||31.1|
|GAIN||Gladstone Investment Corporation||11.50||7.0||376.1||16.7||116.9|
|GLAD||Gladstone Capital Corporation||9.65||8.7||268.6||11.5||99.9|
|GNL||Global Net Lease Inc.||20.82||10.1||1,510.0||10.0||101.0|
|GOOD||Gladstone Commercial Corporation||19.20||7.8||567.5||12.3||96.2|
|GRP.U||Granite Real Estate Investment Trust||43.79||4.8||1,988.0||5.3||25.1|
|HCAP||Harvest Capital Credit Corporation||11.06||10.1||71.9||10.1||102.0|
|HGT||Hugoton Royalty Trust||0.44||25.2||17.6|
|HRZN||Horizon Technology Finance Corporation||11.23||10.7||128.8||10.1||108.7|
|IPL.TO||Inter Pipeline Ltd.||23.29||7.3||9,013.0||15.7||114.6|
|LAND||Gladstone Land Corporation||12.57||4.2||204.1||23.7||99.4|
|LTC||LTC Properties Inc.||44.68||5.1||1,786.7||14.7||74.6|
|MAIN||Main Street Capital Corporation||39.46||5.9||2,401.5||15.6||92.1|
|O||Realty Income Corporation||57.49||4.6||16,680.4||18.4||84.6|
|ORC||Orchid Island Capital Inc.||7.53||12.8||390.3||4.3||55.0|
|PBA||Pembina Pipeline Corp. (Canada)||33.23||5.2||16,959.1||21.7||112.3|
|PFLT||PennantPark Floating Rate Capital Ltd.||13.31||1.5||513.7||12.6||19.3|
|PSEC||Prospect Capital Corporation||7.42||9.7||2,708.0||9.6||93.4|
|RNW.TO||TransAlta Renewables Inc.||11.90||7.9||3,140.0||32.2||254.7|
|SBR||Sabine Royalty Trust||41.15||7.6||600.7|
|SCM||Stellus Capital Investment Corporation||13.88||9.8||221.3||12.1||118.3|
|SJR||Shaw Communications Inc.||19.57||4.5||9,550.8||15.4||69.7|
|SJT||San Juan Basin Royalty Trust||4.52||8.0||221.9|
|SPB.TO||Superior Plus Corp.||13.00||5.6||2,317.0||-86.7||-488.8|
|STAG||Stag Industrial Inc.||28.24||5.0||2,949.7||16.1||81.1|
|SUNS||Solar Senior Capital Ltd.||16.84||8.4||268.4||12.0||101.4|
|VET||Vermilion Energy Inc. Common (Canada)||32.79||6.6||4,890.8||126.1||831.0|
|Ticker||Name||Price||Dividend Yield||Market Cap ($M)||P/E Ratio||Payout Ratio|
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.
The rest of this article will explain in detail how this spreadsheet can be used to improve your investing.
How to Use the Monthly Dividend Stocks Sheet to Find Dividend Investment Ideas
For investors that rely on their dividend stock portfolios to generate passive monthly income, one of the main concerns will be 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. It will also show you how to filter for stocks with a payout ratio of less than 90% (meaning that for each $1.00 of earnings, $0.90 – or less – is distributed to shareholders as dividends).
Step 1: Download the monthly dividend stocks excel sheet at the link above.
Step 2: Click on the ‘filter’ icon at the top of the payout ratio column.
Step 3: 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.
Step 4: Filter the sheet for all payout ratios less than 90% by filtering for ‘Less Than’ and ’90’.
Steps 3 and 4 are shown in the following diagram.
The Comprehensive List of Monthly Dividend Stocks
The list of monthly dividend stocks (and corresponding Sure Dividend analysis, where possible) can be seen below:
- AGNC Investment (AGNC)
- Apple Hospitality REIT (APLE)
- Capitala Finance Corporation (CPTA)
- Chatham Lodging (CLDT)
- Chorus Aviation (CHR.TO)
- Corus Entertainment (CJREF)
- Crius Energy Trust (CRIUF)
- Cross Timbers Royalty Trust (CRT)
- Dream Global REIT (DRG.UN.TO)
- Dream Industrial REIT (DIR.UN.TO)
- Dream Office REIT (D.UN.TO)
- EPR Properties (EPR)
- Enerplus (ERF)
- Gladstone Investment Corporation (GAIN)
- Gladstone Capital Corporation (GLAD)
- Gladstone Commercial Corporation (GOOD)
- Global Net Lease (GNL)
- Granite Real Estate Investment Trust (GRP)
- Harvest Capital Credit Corporation (HCAP)
- Horizon Technology Finance (HRZN)
- Hugoton Royalty Trust (HGT)
- Inter Pipeline (IPL.TO)
- Gladstone Land Corporation (LAND)
- LTC Properties (LTC)
- Main Street Capital (MAIN)
- Orchid Island Capital (ORC)
- Realty Income (O)
- Pembina Pipeline (PBA)
- Pennant Park Floating Rate (PFLT)
- Prospect Capital Corporation (PSEC)
- Sabine Royalty Trust (SBR)
- Shaw Communications (SJR)
- San Juan Basin Royalty Trust (SJT)
- Stag Industrial (STAG)
- Stellus Capital Investment Corporation (SCM)
- Student Transportation (STB)
- Superior Plus (SPB.TO)
- Solar Senior Capital (SUNS)
- 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. .
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, because it allows 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 excess returns over quarterly compounding.
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.
Other Sources of Dividend Investment Ideas
To the maximum extent possible, I want to spread the word about the benefits of investing in:
- Shareholder friendly companies (long dividend histories)
- With strong competitive advantages
- Trading at fair or better prices
To that end, Sure Dividend has created (and regularly updates) the following databases of stocks to help investors identify high-quality businesses suitable for investment.
The first group of stock databases is based on dividend history. The Lindy Effect suggests that companies with long periods of steadily increasing dividends are highly likely to continue increasing their dividends into the future. This is why dividend history matters.
With that in mind, the following lists are great places to find dividend investment ideas:
- The 2017 List of All 264 Dividend Achievers
- The Dividend Aristocrats List: 25+ Years of Rising Dividends
- The Dividend Kings List: 50+ Years of Dividend Growth
Looking for dividend stocks with high yields (rather than a long dividend history)? The following database will be useful:
Investors can also benefit from studying the portfolios of established, successful investors.
To that end, Sure Dividend maintains the following stock databases:
- Warren Buffett’s Top 20 Dividend Stocks
- Joel Greenblatt’s Top 20 High Dividend Stocks
- Seth Klarman’s Top 5 High Dividend Stocks
- Prem Watsa’s Dividend Stock Portfolio: Every Holding Analyzed
- Bill Gates’ Stock Portfolio: Every Holding Analyzed
Having databases of high-quality dividend stocks is most powerful when investors can apply a quantitative ranking methodology that is academically verified to either improve returns or reduce risk (or, ideally, both).
That’s exactly why Ben created The 8 Rules of Dividend Investing, a system that contains 5 buy rules, 2 sell rules, and 1 broader portfolio management rule.
The 8 Rules are used to systematically identify and rank dividend stocks to be published in each month’s Sure Dividend Newsletter.