These yields are four times that of the typical S&P 500 dividend stock.
Right now, a lot of investors are going “risk off” with their portfolio, thanks to the volatility on Wall Street. That often means running after dividend stocks, both for the comfort of regular payouts as well as the more fundamental fact that a stock has to be comfortably profitable to support consistent distributions to its shareholders. If you’re looking to reduce your uncertainty, then consider the following seven monthly dividend stocks, which have proven their reliability through profit-sharing payments every 30 days. Like other stocks, they certainly face short-term volatility, but if you hang on for the long haul you can capture dividends that are at least four times the typical S&P 500 dividend stock in 2022.
Armour Residential REIT Inc. (ticker: ARR)
Like many stocks out there, Armour has been hit pretty hard by the recent market volatility. However, it has continued to pay its 10-cent monthly dividend like clockwork, and at current pricing it has a simply phenomenal yield. Though structured as a REIT, or real estate investment trust, Armour doesn’t own physical properties but instead invests in residential mortgage-backed securities. That means it operates more as a financial stock, and can be susceptible to higher interest rates because it borrows cash to fund these purchases of mortgage-backed securities. However, ARR clearly reflects these challenges after its stock price has declined lately — and even though shares may struggle to get back to prior highs from a year or two ago, the monthly payouts should be more than enough to keep you happy as a shareholder.
Dividend yield: 14%.
Dynex Capital Inc. (DX)
If you like double-digit yields in mortgage-related REITs but you’re a bit wary of the volatility in ARR, Dynex offers an alternative. Shares are down so far in 2022, but as of this writing have declined less than the broader S&P 500 index. Furthermore, DX invests largely in mortgage-related securities that include federally guaranteed loans through Fannie Mae and Freddie Mac to provide a bit of a backstop on its portfolio. While shares haven’t exactly been going like gangbusters lately, they have held relatively firm. That’s likely in part because it is seen as a safe-haven investment by dividend-oriented investors, considering its regular and substantial payouts.
Dividend yield: 9.8%
EPR Properties (EPR)
Moving on to REITs that own physical properties, EPR is a commercial real estate firm that has stakes in entertainment-oriented locations including movie theaters, ski resorts, casinos and other “experiential” properties across 44 states. This is a great business model right now, as the American public is returning to travel after the cabin fever of coronavirus. These domestic properties are also largely insulated from geopolitical unrest in Eastern Europe and high energy prices. Sure, it could take a tank of gas to get there, but it’s much cheaper to drive to a resort than to fly across the country when oil is more than $100 a barrel. This monthly dividend stock only recently resumed its payouts in 2021 after the pandemic-related disruptions, but its 27.5-cent monthly payday adds up to a big yield that makes it worth a look.
Dividend yield: 6.2%
Gladstone Capital Corp. (GLAD)
Gladstone Capital is a financial firm that operates much like a venture capital fund or private equity firm, searching out profitable investments in other businesses and then passing the profits from its successes on to shareholders. It focuses on debt and equity stakes in small and midsize companies through loans ranging from $7 million to $30 million with terms of up to seven years. The current list of its investment stakes include positions in food companies, chemical manufacturers, real estate firms and small technology enterprises, among others. The result is a diversified debt portfolio that delivers consistent payouts every month.
Dividend yield: 7.1%
Main Street Capital Corp. (MAIN)
Main Street Capital is another finance-related monthly dividend stock. Through debt offerings and direct stakes, MAIN provides capital to midsize companies that are too large to easily get a loan at a local bank but too small to earn the attention of big Wall Street financial services firms. MAIN has performed slightly better than the S&P 500 year to date, thanks in part to its quality portfolio. But its real appeal is its 21.5-cent monthly dividend, which adds up to a significant yield for those who buy and hold for the long haul.
Dividend yield: 6.4%
Sabine Royalty Trust (SBR)
Sabine is perhaps the most unique stock on this list, for several reasons. The first is its breakout performance, rising 55% in the last six months alone due to surging energy prices. The second reason is because SBR is not a traditional business with offices or products, but rather an investment vehicle that steadily sells off its underlying assets and pays back shareholders from royalties. In this case, Sabine Royalty Trust is bleeding down a massive network of energy fields from Florida to New Mexico. Because of the dependence on market pricing, there’s sometimes big volatility in the payouts of this monthly dividend stock as it brings fossil fuel to market. But considering oil prices are around $110 with no sign of slowing down, the payouts have been quite generous lately.
Dividend yield: 7.2%
SLR Senior Investment Corp. (SUNS)
SLR Senior Investment is a business development company, or BDC. This kind of stock invests in other firms to generate monthly dividends from the returns on that capital. SUNS primarily invests in companies via first lien debt, where it is the primary lender and thus gets first dibs on assets if things get rocky, or even in “unitranche” transactions where it is the sole controller of all debt at a given company. Despite this model, which leaves SLR Senior Investment quite exposed to an individual company’s troubles, it is nevertheless quite diversified as a whole, with more than 230 investments in its portfolio. This allows the company to thrive even if one or two investments hit a snag, and helps support generous and reliable monthly dividends.
Dividend yield: 8.9%.
Here are the seven best monthly dividend stocks to buy now:
— Armour Residential REIT Inc. (ARR)
— Dynex Capital Inc. (DX)
— EPR Properties (EPR)
— Gladstone Capital Corp. (GLAD)
— Main Street Capital Corp. (MAIN)
— Sabine Royalty Trust (SBR)
— SLR Senior Investment Corp. (SUNS)
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