7 Best Monthly Dividend Stocks With High Yields
Monthly dividend stocks offer investors the opportunity to generate recurring passive income. This frequency better matches the schedule of many regular invoices, allowing an investor to offset his expenses with dividend income. This makes monthly dividend stocks ideal for retirees or other investors who rely on their portfolios for their income.
With monthly dividend payments in mind, here is an overview of the best options for those looking for a recurring income from a high dividend yield.
Best Monthly Dividend Stocks for 2021
At the last count, nearly 50 shares were paying a monthly dividend. However, not all of them deserve the attention of an investor. Here is a list of the best monthly dividend stocks to consider in 2021:
Here’s a closer look at each of these top monthly dividend stocks, which offer much higher dividend yields than the average stock in the S&P 500 (1.3% as of September 16, 2021).
OK Real Estate
Agree Realty is a real estate investment trust (REIT), which are excellent stocks of monthly income as they generate recurring rental income. The company owns independent commercial buildings secured by triple net leases, which means tenants take responsibility for building insurance, maintenance and property taxes. It focuses on the ownership of properties leased to essential retailers such as grocery, home improvement, dollar stores and drugstores, which are less likely to be disrupted by e-commerce or a recession.
While Agree Realty is new to paying monthly dividends – it has moved from a quarterly payment schedule to a monthly payment schedule in January 2021 – it has an excellent dividend history overall. This REIT has increased its dividend at a compound annual rate of 5% over the past decade.
This upward trend is expected to continue as Agree Realty continues to expand its portfolio. It plans to acquire up to $ 1.4 billion in properties in 2021, increasing its rental income and ability to pay dividends. Agree Realty has a strong balance sheet to help fund its continued expansion.
Gladstone Land is also a REIT. It specializes in the ownership of agricultural land and related facilities which it mainly leases to farmers on a triple net basis. It focuses on farms that grow healthy foods such as fruits, vegetables, and nuts because they are less sensitive to price volatility than staple crops like corn, wheat, and soybeans.
Gladstone Land has a strong dividend history. The REIT has increased its payout 23 times over the past 26 quarters, increasing it by over 50% during that time. It aims to continue increasing its monthly dividend at a rate above inflation.
The engine of the company’s growth is the constant increase in rental income of existing farms through annual rent increases and a constant flow of new farm acquisitions. Gladstone purchased 13 farms and over 20,000 acre-feet of reserve water for nearly $ 80 million in the second quarter of 2021. These investments have increased its agricultural portfolio while reducing drought risk for some of its farms.
EPR Properties is another REIT. She specializes in owning experiential real estate such as movie theaters, dining venues, ski resorts, and gaming facilities. It secures these assets by signing triple net leases with the operators of the theaters.
The COVID-19 pandemic has had a significant impact on experiential real estate. Many of these facilities have had to close their doors temporarily or operate at reduced capacity. This impacted their ability to pay rent, forcing EPR Properties to suspend its monthly dividend last year.
However, with the vaccines widely available, more and more people have the confidence to have experiences outside the home again. As a result, EPR tenants are catching up with their rent delays. This allowed the REIT to resume its monthly dividend in July 2021.
Although ERP Properties is already offering an attractive return, the REIT may increase this payout in the future as it expands its portfolio. He had more than $ 500 million in cash by mid-2021 and an unused $ 1 billion credit facility to purchase more experiential real estate.
Pembina Pipeline is a Canadian energy infrastructure company. It operates pipelines, processing plants, storage terminals and export facilities. The company primarily rents the ability to use its assets to others energy companies under long-term fixed rate contracts. These agreements allow Pembina to generate consistent cash flow.
Pembina has a strong history of dividends, as it has steadily increased its payouts over the years. It should be able to continue increasing its dividend in the future as it completes other energy infrastructure expansion projects. It has a large backlog of secured projects and several more in its development pipeline to fuel future dividend growth.
In addition to continuing to support the fossil fuel movement, Pembina is investing in low carbon projects. It is working with another Canadian energy infrastructure company on a carbon dioxide transportation and sequestration system to support its wind assets. He is also exploring opportunities in hydrogen.
Real estate income
When it comes to monthly dividend stocks, Realty Income is the clear leader. It markets itself as The Monthly Dividend Company, paying 615 consecutive monthly dividends at the end of 2021. Additionally, Realty Income has increased its dividend 112 times since its IPO (Initial Public Offering) in 1994, including each of the last 96 consecutive quarters. This gives this REIT over 25 years of dividend raising, qualifying it as a Dividend Aristocrat.
Realty Income should be able to continue to provide investors with a constantly growing monthly income stream going forward. He agreed to acquire another REIT TRUTH (NYSE: VER) in 2021, which is expected to close by the end of the year. The deal will create a $ 50 billion REIT giant while improving its cash flow per share by more than 10%. It will also further diversify its portfolio while retaining the financial flexibility necessary to continue acquiring cash-generating real estate.
Excluding VEREIT, Realty Income was on track to purchase $ 4.5 billion worth of properties in 2021. With one of the best track records in the industry, it has the financial capacity to continue to grow.
SL Green is another REIT, and it is the largest office owner in New York. While the city’s office sector has faced some challenges related to the pandemic, SL Green has held up relatively well.
This is evident in the rent collection rate and the rental activity of the business. It received 97.9% of the office rent it invoiced in 2020 and 94.8% of its overall rent. Meanwhile, this REIT has signed leases covering over 900,000 square feet in the first six months of 2021 and at rental rates only 1.7% lower than maturing rental rates on the same space. This kept the occupancy rate at a healthy level of 93.6%. This demand shows that companies are planning to return to their Big Apple offices in the future.
At the same time, office buildings remain highly sought after by institutional investors because they generate predictable income. This has enabled SL Green to sell selected properties at attractive prices. He used that money to pay down debt, buy back stocks, and fund new developments. This REIT has also been able to continue to pay an increasing dividend. It recorded its 10th consecutive dividend increase last year, making it a Dividend distributor.
STAG Industrial is another REIT with a monthly dividend. It focuses on the ownership of industrial buildings such as warehouses and light industrial facilities. These properties are in high demand these days since the pandemic accelerated the adoption of e-commerce and increased manufacturing in the United States to combat supply chain issues.
STAG has steadily increased its dividend over the years. The engine of its growth has been its ability to constantly expand its portfolio. STAG has added more than 400 properties to its portfolio since its IPO ten years ago.
The company expects this steady expansion to continue, targeting $ 1 billion to $ 1.2 billion in real estate purchases this year. Add to that the growing rental income from its existing properties, and STAG should be able to continue increasing its monthly dividend.
Invest in monthly dividend stocks for recurring income
Monthly dividend stocks make it easy for investors to earn passive income. They can use this money to cover their monthly expenses or reinvest their dividends and prepare to generate even more recurring cash flow in the future when they need it. While dozens of companies pay monthly dividends, this group of dividend stocks stands out as the best options for those looking for an attractive income stream that is expected to grow in the future.