7 Best Monthly Dividend Stocks to Buy

These stocks yield at least 4.2% annually.

The S&P 500 is down almost 20% year to date as inflation continues to run amok and the Federal Reserve continues to tighten monetary policy. As a result of these developments, many investors are looking for more stability and reliability in their portfolios. One go-to method for those who want a bit more dependability is to rely on income-oriented investments — and there is perhaps no more dependable investment than a stock that pays you every single month instead of just once per quarter. The following monthly dividend stocks all offer yields of at least twice that of the S&P 500 at present, and as high as 12.6% based on current distributions. Dividend yields are calculated based on their trailing-12-month (TTM) payouts, unless otherwise stated.

AGNC Investment Corp. (ticker: AGNC)

We’ll start with the biggest yield, but also the biggest risk among the monthly dividend stocks on this list. Structured as a real estate investment trust, or REIT, AGNC invests in residential mortgages backstopped by government agencies such as Fannie Mae and Freddie Mac. As the financial crisis of 2008 showed, however, even government-backed mortgages can be risky when a deep recession happens. However, if you’re not afraid of this model and are captivated by the mammoth dividend yield, it’s worth noting AGNC is still soundly profitable and can sustainably pay its dividend based on projections for both fiscal 2022 and 2023. That may change — but if it doesn’t, you cash in big time on this monthly dividend stock.

Dividend yield (TTM): 12.4%

EPR Properties (EPR)

EPR is another REIT, but this stock is focused on commercial real estate instead of residential properties. 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. There is obviously risk of a pullback here given concerns about consumer spending. However, EPR recently increased its payouts 10% from 25 cents monthly to 27.5 cents monthly in March, hinting that management is optimistic about its future prospects. It’s also worth noting that EPR stock is actually up about 6% this year while the rest of Wall Street has been struggling.

Dividend yield (TTM): 6.2%

Gladstone Capital Corp. (GLAD)

Gladstone is a financial firm that invests in debt securities of established but smaller or midsize companies that are looking for financing. As with the other stocks on this list, there are risks to this model in the current environment where some investors are fearful of global recession. However, with more than 260 deals under its belt and a portfolio valued at more than $3 billion, one mistake isn’t going to sink this company. Its holdings include some growth-oriented names but also a fair share of recession-proof companies including packaged food producers, chemical companies, education firms, telecommunications firms and others. The result is a diversified debt portfolio that delivers consistent payouts every month.

Dividend yield (TTM): 7.4%

LTC Properties Inc. (LTC)

Another real estate-related investment, the LTC in this stock’s name stands for “long-term care.” It focuses on senior housing and skilled nursing facilities, and as a result offers one of the most reliable streams of income of the stocks on this list. After all, one thing that is constant in both good and bad times is the need to provide care for the older generation. And thanks to the changing demographics of the U.S., with projections that the population of those 65 and older will more than double over the next 40 years, this is as close to a sure thing as you’ll find. In the here and now, however, LTC also has something to offer investors with its gain of more than 15% so far since January on top of a generous monthly dividend.

Dividend yield (TTM): 5.8%

Realty Income Corp. (O)

When it comes to monthly dividend stocks, Realty Income is the go-to name for many investors. In fact, this commercial real estate firm has a corporate tagline of “the monthly dividend company.” It has paid more than 600 consecutive monthly dividends, and is a member of the S&P 500 dividend aristocrats index with more than 25 straight years of annual dividend increases. It recently acquired fellow commercial real estate firm VEREIT Inc. to further fuel its long-term performance, and support its mission of single-tenant properties like big-box store locations or restaurants that are rented to major companies under long-term deals. This will surely support Realty Income’s already impressive track record of generous monthly dividends.

Dividend yield (TTM): 4.2%

Sabine Royalty Trust (SBR)

In 2022, a number of energy stocks did quite well — at least, up until the bottom fell out from key energy commodities like crude oil and natural gas. SBR has seen a bit of trouble lately itself, but the Canadian energy infrastructure company is still up about 50% since Jan. 1 thanks to elevated energy prices. This investment is fundamentally a play on trusts’ energy reserves, which generate cash when sold that is passed on directly to shareholders based on market value. And while energy prices have indeed rolled back, they are still elevated enough versus prior years to support a substantial dividend. Just keep in mind the payouts are more volatile than some of the other stocks on this list and can vary significantly month to month.

Dividend yield (TTM): 9.5%

Stellus Capital Investment Corp. (SCM)

Stellus Capital had a rough go of things this spring, but this monthly dividend stock has rebounded nicely since June with a roughly 10% gain since its summer lows even as the rest of Wall Street has been plunged into uncertainty. While dividends are still down from their pre-COVID levels, they’ve been steadily moving higher from 8.3 cents monthly at the beginning of 2021 to 11.3 cents presently — a boost of 36% in less than two years. Stellus is a business development company that specializes in investments in private middle-market companies that generate between $5 million and $50 million in earnings annually. There’s risk in some of these firms should the broader economy stumble, but Stellus has a history of doing well even in challenging environments. And besides, the big-time monthly dividend is a great hedge if things get rough.

Dividend yield (TTM): 10%

7 best monthly dividend stocks to buy now:

— AGNC Investment Corp. (AGNC)

— EPR Properties (EPR)

— Gladstone Capital Corp. (GLAD)

— LTC Properties Inc. (LTC)

— Realty Income Corp. (O)

— Sabine Royalty Trust (SBR)

— Stellus Capital Investment Corp. (SCM)

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7 Best Monthly Dividend Stocks to Buy originally appeared on usnews.com

Update 07/19/22: This story was published at an earlier date and has been updated with new information.

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