10 Stocks That Pay Dividends Monthly
In this article we present the list of 10 Stocks That Pay Dividends Monthly. Click to skip ahead and see the 5 Stocks That Pay Dividends Monthly.
Shaw Communications Inc. (NYSE:SJR), Pembina Pipeline Corporation (NYSE:PBA), and STAG Industrial, Inc. (NYSE:STAG) are a few of best stocks that pay monthly dividends, providing a steady stream of income to their shareholders.
Monthly dividend stocks are among the most coveted by dividend investors given the continuous stream of income they provide, which can balance out the less frequent payouts of companies that pay dividends either quarterly (which is the most common timeframe), semi-annually, or annually.
If a dividend investor is reinvesting their dividend payments, monthly payments also provide a distinct advantage over those with longer timeframes, allowing the money to be reinvested and to begin compounding more quickly.
So while two different stocks could have the exact same dividend yield, one that pays out monthly would compound quicker than one that pays out quarterly (assuming the same reinvestment growth rates), making it more valuable. That’s an important consideration to factor in when examining dividend yields and other aspects of the best income stocks.
Another benefit to investing in companies that pay out monthly dividends is that those stocks tend to be safe dividend bets, with steady income streams that support their monthly payments. Financial companies and real estate investment trusts are frequently the most common sources of monthly dividend payments given their predictable and recurring cash flows.
In addition to the stocks featured on this list, investors interested in generating steady monthly income streams through their investments could consider several monthly dividend ETFs. These ETFs provide the added benefit of being able to invest in some of the highest-yielding stocks on the market that don’t necessarily pay out monthly themselves, while still being able to collect monthly payments from the ETF.
Now then, let’s check out some of the top monthly dividend stocks, analyzing their dividend history, payout ratios, and more to determine which are the safest stock picks for dividend investors.
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Our Methodology
The following monthly dividend stocks are ranked based on hedge fund sentiment. We follow a select group of hedge funds because Insider Monkey’s research has uncovered that their consensus stock picks can deliver outstanding returns.
All hedge fund data is based on the exclusive group of 900+ funds tracked by Insider Monkey that filed 13Fs for the Q2 2022 reporting period.
10 Stocks That Pay Dividends Monthly
10. Ellington Financial Inc. (NYSE:EFC)
Number of Hedge Fund Shareholders: 4
Monthly Dividend Payout: $0.15
Pembina Pipeline Corporation (NYSE:PBA), Shaw Communications Inc. (NYSE:SJR), and STAG Industrial, Inc. (NYSE:STAG) are three of the top monthly dividend stocks that investors should consider. Another is mortgage REIT Ellington Financial Inc. (NYSE:EFC), which switched to monthly from quarterly dividend payments in 2019.
Ellington Financial Inc. (NYSE:EFC) has a ten-year track record of making dividend payments, though just a one-year streak of dividend growth. The company’s next $0.15 payout will be on November 25 to shareholders of record as of October 31. The company’s payout ratio is just over 105%, which could prompt a pullback in the dividend in the coming months, as the company has been forced to do in the past. Nonetheless, with a 13.5% yield, the stock should have attractive payouts even in the event of a modest cut to the dividend. Ellington Financial has a book value of $15.22 as of Q3, nearly two dollars higher than what the company’s shares currently trade for.
Ellington Financial Inc. (NYSE:EFC) has fallen to a 3-year low in hedge fund ownership following a 60% drop in the number of smart money shareholders of the stock since Q3 2021. Unsurprisingly, Mike Vranos’ Ellington is the company’s largest shareholder, owning 927,141 shares on June 30. David Harding’s Winton Capital Management owns 113,271 shares.
9. ARMOUR Residential REIT, Inc. (NYSE:ARR)
Number of Hedge Fund Shareholders: 5
Monthly Dividend Payout: $0.10
ARMOUR Residential REIT, Inc. (NYSE:ARR) currently sports a robust 22.47% dividend yield, though like Ellington Financial its payout ratio is slightly above 100% at 103.45%, though the company’s estimated distributable earnings for Q3 exceeded its dividend payouts. The company was forced to skip two of its monthly dividend payments in the second quarter of 2020 and subsequently lowered its payout to $0.09 from $0.17. It bumped the payout up to $0.10 in July 2020, which it has maintained since.
ARMOUR Residential REIT, Inc. (NYSE:ARR)’s book value per share fell from $7.25 on June 30 to between $5.79 and $5.83 as of September 30. ARR shares currently trade for $5.34. B. Riley analyst Matt Howlett lowered his price target on ARR to $6 from $8.50 in late October and has a ‘Neutral’ rating on the shares. He believes that mortgage REITs had a rocky Q3 given the lack of stability in the fixed income markets.
Just five of the hedge funds tracked by Insider Monkey’s database were long ARMOUR Residential REIT, Inc. (NYSE:ARR) on June 30, down from 13 funds a year earlier. Ken Griffin’s Citadel Investment owns 1.57 million ARR shares, by far the largest stake among those five funds.
8. Broadmark Realty Capital Inc. (NYSE:BRMK)
Number of Hedge Fund Shareholders: 8
Monthly Dividend Payout: $0.07
Broadmark Realty Capital Inc. (NYSE:BRMK) began making $0.12 monthly dividend payments at the end of 2019 but slashed its payments to $0.08 and later $0.06 over the following four months. It has since raised its payments to $0.07, which it’s maintained for nearly two years. The stock’s dividend yield stands at 14.21%, while the company’s payout ratio is a worrisome 129%.
Broadmark Realty Capital Inc. (NYSE:BRMK) pulled in Q2 revenue of $28.5 million and earnings per share of $0.16, both of which slightly missed estimates. The company noted that while it would like to speed up the pace of originations, it’s focused on staying disciplined and maintaining its fortress balance sheet during a volatile period for the market. Piper Sandler analyst Crispin Love has a $5.50 price target and ‘Underweight’ rating on BRMK shares.
Hedge fund ownership of Broadmark Realty Capital Inc. (NYSE:BRMK) has trended down since the company first went public through a merger with special acquisition company Trinity Merger Corp. in November 2019. Less than half the number of funds were long BRMK on June 30 as there were at the end of 2019. Farallon Capital, founded by Thomas Steyer, has been a prominent shareholder of the stock since the beginning and owned 4.85 million shares on June 30.
7. Dynex Capital, Inc. (NYSE:DX)
Number of Hedge Fund Shareholders: 13
Monthly Dividend Payout: $0.13
Dynex Capital, Inc. (NYSE:DX) switched to monthly dividend payments in 2019. The financial services company cut its payments to $0.13 from $0.15 in the middle of 2020, which it has maintained since. The company’s payout ratio stands at 102%, while its shares yield 12.95%. Its next dividend payment is scheduled for November 1 to shareholders of record as of October 21.
Dynex Capital, Inc. (NYSE:DX) earned $0.24 per share in Q3, well below the company’s dividend payouts, though it noted that the figure included a $0.06 severance charge related to its transition to a new CFO. That figure also didn’t include the benefit of interest rate hedge gains, which totaled nearly $150 million. The company’s book value declined during the quarter due to the broader volatility, though its liquidity remained strong.
The smart money was showing keen interest in Dynex Capital, Inc. (NYSE:DX) during Q2, as the number of funds long DX more than doubled during the quarter. Israel Englander’s Millennium Management, David Harding’s Winton Capital, and John Overdeck and David Siegel’s Two Sigma Advisors were some of the funds to add the stock to their portfolios during Q2.
6. Banco Bradesco S.A. (NYSE:BBD)
Number of Hedge Fund Shareholders: 14
Monthly Dividend Payout: $0.0036
Closing out the first half of the list is Banco Bradesco S.A. (NYSE:BBD), which in addition to monthly dividend payments, also routinely issues special dividends during the year. The company’s next dividend payment on November 8 is scheduled to be $0.37, to be followed by $0.36 payments in December and January. The company’s dividends tend to fluctuate slightly from month to month.
Banco Bradesco S.A. (NYSE:BBD) shares have a dividend yield of 2.28% and the company’s payout ratio is a paltry 20.7%. The commercial bank, which operates primarily in Brazil, could be facing a challenging quarter in terms of asset quality according to data released by the Central Bank of Brazil. In broader terms, Brazil’s GDP growth remains solid while inflation has slowed, which are promising signs for Banco Bradesco’s primary market.
The number of funds long Banco Bradesco S.A. (NYSE:BBD) has ticked down by 30% over the past two years, but a number of firms remain bullish on the company. Ken Fisher’s Fisher Asset Management owns 24.9 million shares as of June 30, while Fabiana Gelband Leite’s Atmos Capital owns 4.25 million shares and has 2.1% 13F exposure to the stock.
Shaw Communications Inc. (NYSE:SJR), STAG Industrial, Inc. (NYSE:STAG), and Pembina Pipeline Corporation (NYSE:PBA) are some of the monthly dividend stocks featured in the second half of this article. Check it out by clicking the link below.
Click to continue reading and see the 5 Stocks That Pay Dividends Monthly.
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Disclosure: None. 10 Stocks That Pay Dividends Monthly is originally published at Insider Monkey.
