Greater dividend frequency can help income investors. When it comes to income opportunities, many investors look for reliability. That’s particularly true for those at or near retirement and are looking for stocks that can provide…
Greater dividend frequency can help income investors.
When it comes to income opportunities, many investors look for reliability. That’s particularly true for those at or near retirement and are looking for stocks that can provide a regular paycheck to offset living expenses. While income investors are accustomed to quarterly dividends, there are stocks that pay once a month. Not only do monthly distributions help with a budget, they also speak to a well-run company that can manage its cash flows in 30-day increments — in good times and bad. Here are eight companies with the stability and to pay dividends once a month.
Chatham Lodging is the franchise operator of properties under popular names including Marriott, Hilton and Hampton Inn, with a portfolio of 135 properties across the country. CLDT is structured as a real estate investment trust, or REIT. This special class of publicly traded stock is granted a favorable tax status thanks to the capital-intensive nature of a business that has to hold a lot of property — but in exchange for those breaks, has to deliver 90 percent of taxable income back to shareholders. That’s a mandate for big dividends, paid monthly by this hotel stock.
A similar business to Chatham, Apple Hospitality operates hotels under the Hilton and Marriott brands and is structured as a REIT. It’s slightly larger, with a market capitalization of about $4 billion and roughly double the number of properties. What’s interesting about APLE as an alternative, however, is that it focuses on lodging in strategic locations. Those sites include key commerce areas near malls or attractions, as well as urban areas. This ensures high occupancy rates — and reliable revenue to fuel dividends.
A twist on the prior picks, Stag Industrial is a REIT focused on a different kind of tenant — businesses that include warehousing firms and manufacturers in industrial parks nationwide. Stag generally provides buildings to single tenants for exclusive use, but across almost 400 different properties with 72.5 million square feet, it has a nicely diversified portfolio. Also, investors looking for reliable monthly dividend payouts can’t easily get access to industrial stocks — particularly after the public disgrace of one-time industrial darling General Electric Co. (GE). That makes STAG one of the best places to turn for reliable income in this sector.
Keeping with the theme of real-estate inspired income, LTC offers a health care twist. This REIT is in about 200 senior housing and nursing center projects across 28 states. Senior housing and health care are among the most reliable trends to invest in, given that nobody can stop the steady march of time and the aging baby boomer population continues to drive up demand. With steady rent checks in senior living centers fueling reliable dividends, LTC can pay its monthly dividends regardless of broader economic trends.
Building and maintaining the terminals and storage facilities that handle crude oil and natural gas around the U.S. isn’t cheap, but many operators get around this by soliciting funds from investors and then giving them a cut of the income. Pembina charges energy companies to use its pipelines and then passes on a portion of that revenue to shareholders. Pembina expanded last year by acquiring Canadian energy infrastructure rival Veresen, strengthening the company’s position and increasing its scale. That should help ensure the dividends keep flowing.
A more volatile play on the energy sector, Sabine Royalty Trust provides monthly income for investors by selling energy from its oil and gas fields. That’s a double-edged sword, because while there is more potential for profits when energy prices are high, inevitably the wells will run dry. That’s not a near-term concern, with Sabine’s year-end report from 2017 estimating proven reserves total about 7 billion barrels. Dividend payouts fluctuate based on the market. The recent tailwind to commodity prices kept crude oil well over $70 a barrel and made SBR a profitable holding in 2018.
Main Street Capital is a financial firm that operates as a kind of publicly traded venture capital or private equity fund. MAIN makes investments, either via loans or direct equity stakes, in small and mid-sized companies it thinks will pay off in the long term. From salt-of-the-earth investments including a hydraulic hose distributor to more innovative tech and communications firms, Main Street goes where it thinks the profits are — and then passes a piece of that success back through monthly dividends. A strong record of success and an uptrend for the U.S economy has helped MAIN stock lately.
A different kind of monthly dividend payer in the financial sector, Banco Bradesco is a Brazil-based bank that most investors wouldn’t recognize. With a massive market capitalization topping $40 billion, it’s on par with some of the U.S. financial stocks. Brazil has seen political and economic turmoil, and from a share-price perspective, BBD stock isn’t that much better now than it was at its 2016 lows. However, bargain valuations lead to a tremendous dividend yield, and long-term investors with a higher risk tolerance may target this emerging markets play while the price is right and before dividends ramp up again.