Harness regular paydays with these monthly dividend stocks.
There are never any sure things on Wall Street, and in 2022 it’s particularly difficult to have confidence in your portfolio amid all the uncertainty. From red-hot inflation to continued conflict in Ukraine to rising interest rates, you never know what’s going to spark the next sell-off. In such an environment, investors place a premium on reliability. And right now, there are a few monthly dividend stocks that have a strong track record of regular payouts as well as generous yields that are a minimum of 5.3% and as high as 9.9% at current pricing. What’s more, some of these picks have pushed higher even in the face of deep declines for the major indexes. If you’re interested in reliable income and alternatives to the usual large-cap stock, consider these seven monthly dividend stocks to buy now.
EPR Properties (ticker: EPR)
EPR is a stock with a lot to offer. For starters, it’s a commercial real estate firm structured as a real estate investment trust, or REIT. This type of business structure demands that EPR deliver 90% of its taxable income back to shareholders, which results in a mandate for big dividends. It also has some nice growth ahead of it, as its properties are all entertainment-oriented locations such as resorts, theaters and other “lifestyle” properties that are increasingly in demand as we move past COVID-19 travel restrictions. And the icing on the cake is that this stock just bumped up its payouts 10%, from 25 cents monthly to 27.5 cents monthly, on the prospect of improving operations. EPR stock is one of the rare companies on Wall Street that is actually posting a gain year to date, and that performance alongside a generous yield makes it a top monthly dividend stock to consider.
Dividend yield: 6.5%
Horizon Technology Finance Corp. (HRZN)
If you don’t want to chase a stock like EPR, which has become a bit of a crowded trade lately, the flip side is a company like Horizon, which may have a lot of long-term income potential even if 2022 has been a decidedly rough year. As the name implies, this firm provides debt and equity investments to tech startups, but an increasingly “risk off” environment has created headwinds, and shares are down more than 20% since Jan. 1. Still, management continues to deliver, and the company is projecting double-digit revenue growth both this fiscal year and next. Furthermore, it has moved into medical technology and green energy opportunities to diversify outside of more traditional tech plays. There’s definitely risk here, but there’s also big-time yield at current prices if you’re patient enough to wait out the current challenges.
Dividend yield: 9.9%
LTC Properties Inc. (LTC)
Just about as low-risk an investment as you’ll find out there, LTC Properties is focused on health care facilities including senior housing and skilled nursing facilities. The stock took a bit of a hit during the pandemic, but the stability of this investment in the long haul is very noteworthy. After all, thanks to the demographics of the U.S., with aging Americans who need more care later in life, there is a huge tailwind behind this stock’s underlying business. This durable trend of long-term care has led LTC to a small year-to-date gain in 2022 even as other, riskier stocks have suffered. And because of the reliable income stream from residents at its facilities, it can also offer a generous and sustainable monthly dividend on top of that.
Dividend yield: 6.6%
Main Street Capital Corp. (MAIN)
Main Street Capital is a monthly dividend stock that operates as a lender to midsize firms that typically are too small to win the attention of major Wall Street names, but too large to easily access ample credit at their local bank or credit union. MAIN provides debt and direct equity investments to these companies, and has invested in some 200 private companies so far to help finance their growth and ongoing operations. The stock has struggled in kind with the S&P 500 year to date, but its high-quality portfolio along with the prospect of higher interest rates on its debt offerings could help this stock bounce back once the dust has settled. In the meantime, its monthly dividend gives investors a reason to be patient and stick with this stock.
Dividend yield: 6.6%
Pembina Pipeline Corp. (PBA)
Pembina is a Canadian energy infrastructure company that operates pipelines, processing plants, storage terminals, and export facilities for natural gas and crude oil. Needless to say, 2022 has been one heck of a year for energy stocks, and Pembina has risen in kind with a more than 20% gain year to date, even as many other stocks have melted down. The real appeal to income investors, however, is the solid “midstream” energy business it operates by serving as an intermediary between crude oil production firms and the wholesalers and refiners at the end of the supply chain. This business has lower margins but tends to be more stable and reliable. That allows it to pay generous monthly dividends that are likely to persist regardless of the ups and downs of crude oil.
Dividend yield: 5.3%
PennantPark Floating Rate Capital Ltd. (PFLT)
PennantPark is another finance-oriented monthly dividend stock. It’s structured as a business development company, or BDC, that makes debt and equity investments in small companies based on the opportunities it sees. This requires a lot of research and expertise, as these smaller companies often are not rated by debt agencies, but that higher-risk profile means a higher rate of return on successful investments. What’s more, the “floating rate” portion of the company’s name speaks to this monthly dividend stock’s ability to commandeer higher interest rates as the broader environment moves in that direction — resulting in a potentially larger income stream over time if this trend persists.
Dividend yield: 9.5%
Stellus Capital Investment Corp. (SCM)
Stellus is one of the smallest stocks on this list, with a market capitalization of a bit more than $250 million. However, big things sometimes come in small packages. Shares have been incredibly stable at this company in 2022, as they remain flat versus their January valuation. Furthermore, SCM recently bumped up its payout from 9.3 cents per share at the end of 2021 to 11.3 cents paid in monthly dividends in each distribution this year. The asset manager primarily makes investments in private middle-market companies, and has built a diverse portfolio that includes media, manufacturing, packaged foods and health care companies that continue to deliver generous and reliable payouts to SCM shareholders.
Dividend yield: 8.6%
7 best monthly dividend stocks for a steady income stream:
— EPR Properties (EPR)
— Horizon Technology Finance Corp. (HRZN)
— LTC Properties Inc. (LTC)
— Main Street Capital Corp. (MAIN)
— Pembina Pipeline Corp. (PBA)
— PennantPark Floating Rate Capital Ltd. (PFLT)
— Stellus Capital Investment Corp. (SCM)
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Update 05/12/22: This story was published at an earlier date and has been updated with new information.