Look to regular income for stability in a tough market.
There are no certainties on Wall Street, and 2022 has proven that for investors in a very brutal way. Once-hot sectors like tech are in the toilet, and fossil fuel companies that some had written off due to the threat of climate change are sitting on tremendous gains. It’s impossible to predict what will come next for the stock market as we charge into 2023, but one thing investors can do to provide a bit more reliability is to focus on income-oriented investments. After all, if you can depend on a regular stream of cash from your stocks then you don’t have to sweat the day-to-day fluctuations as much. The following companies all offer big-time monthly payouts of more than 5%, and they may be a way for you to generate cash without selling a single share.
Apple Hospitality REIT Inc. (ticker: APLE)
Apple Hospitality is a real estate investment trust, or REIT. This special class of corporation is granted preferential tax treatment to facilitate its capital-intensive operations. In exchange, all REITs must deliver 90% of taxable income back to shareholders. The specialization of Apple, if you couldn’t guess from the name, is the hospitality and tourism industry with a diverse portfolio of upscale hotel properties in almost 90 different in-demand markets such as Boca Raton, San Diego and New York City. With pent-up demand for travel in the wake of COVID-19 and the low-risk appeal of REITs and their dividends, Apple stock has actually squeaked out a small gain in 2022 as the market has melted down. This is on top of its already generous dividend yield that recently increased from 5 cents to 7 cents per month as of September.
Dividend yield: 5.2%
EPR Properties (EPR)
EPR is a stock with a lot to offer is and another entertainment-related REIT, but its focus is resorts, theaters and other “lifestyle” properties catering to consumers looking to get away from it all. EPR had been a strong performer in 2022 before news that its second-largest tenant, cinema operator Regal Entertainment, was closing some money-losing locations in the wake of the bankruptcy of its parent company. But while that news isn’t ideal, the market reaction may have been a bit too severe, as Regal accounts for less than 15% of EPR’s revenue. It’s unlikely that every single location will close, and EPR may find a competing theater chain to take up the vacancies. Besides, with an 8.9% dividend yield, EPR gives you something in exchange for taking on the top-line risks.
Dividend yield: 8.9%
Gladstone Capital Corp. (GLAD)
Functioning similar to a venture capital firm, Gladstone searches out profitable investments in pursuit of profits that aren’t correlated to the broader stock market, including farmland leases and recapitalization of manufacturing firms. Investments typically are less than $30 million apiece, giving it a broad portfolio covering a host of industries. Furthermore, the rising interest rate environment means that any debt offerings can command higher margins to fuel Gladstone’s generous dividend payments. According to official filings, GLAD’s strategy is to target “yield investments in growth-oriented companies with proven cash flows, where capital flexibility is highly valued.” This will hopefully see the firm through any market environment and throw off big-time monthly dividends along the way.
Dividend yield: 9.1%
Horizon Technology Finance Corp. (HRZN)
Admittedly, Horizon has had a rough 2022 with shares down about 50% from their 52-week high. However, the yield is in double-digit territory. If you believe that the worst of the downturn in the tech sector is over, this dividend-focused play may be worth a look. HRZN isn’t a software company or a chipmaker, but it does invest in high-tech and high-potential startups in those areas — along with alternative energy companies, biotech firms and other 21st-century opportunities. What’s more, the generous monthly dividend adds up to $1.20 per share annually, but that’s still well under the projected $1.46 in earnings next fiscal year. That means you can harvest a massive payday with peace of mind that the cash won’t run out anytime soon.
Dividend yield: 11.4%
LTC Properties Inc. (LTC)
California-based LTC is a low-risk monthly dividend stock that makes its money from health care facilities, senior housing and related properties across the U.S. The stock rolled back sharply thanks to the weight of COVID-19 fallout during the pandemic, but LTC recently hit its highest level since early 2020 back in August, thanks to a nice recovery in operations. The ugly environment of September slowed that momentum a bit, but the stock is a rare standout all the same with double-digit gains this year even as the rest of Wall Street has been in big trouble. With a generous 19-cent monthly dividend on top and a recession-resistant business model, there’s a lot of reason for investors to have faith in LTC.
Dividend yield: 6%
PennantPark Floating Rate Capital (PFLT)
Miami-based PennantPark offers one of the most generous and consistent yields on Wall Street. PFLT is a financial-oriented monthly dividend stock that operates as a business development company, or BDC. This is a fancy way of saying it makes debt and equity investments in pursuit of capital gains and then passes the profits on to shareholders via generous dividends. The company says it focuses on opportunities with “defensible business models” that will generate strong returns in any market, including a chain of veterinary clinics, a government contractor and health care software firms. These kinds of businesses should be resilient even if consumer spending continues to see short-term pressure.
Dividend yield: 9.4%
SL Green Realty Corp. (SLG)
One of the hardest-hit stocks on this list, SLG may provide upside opportunity for aggressive investors willing to buy and hold. As Manhattan’s largest office landlord, this $2.5 billion real estate company holds interests in roughly 90 buildings totaling more than 38 million square feet of space. However, thanks to the remote work trend and a resulting reshuffle, SLG has been under pressure in 2022 with shares slumping about 50%. The rear-looking yield is quite generous based on current monthly dividends, but there’s a chance that if SL Green doesn’t see a recovery, its distributions will become unsustainable. Still, if you’re confident in the long-term potential of New York and you think the current market mayhem is almost over, SLG offers a bargain buy with a tremendous yield.
Dividend yield: 9.7%
Stellus Capital Investment Corp. (SCM)
Stellus is one of the smallest stocks on this list, at just less than $300 million in market value. However, its dividend is roughly five times that of the S&P 500 index. Shares have hung tough since January, posting just a small single-digit decline on the year, but the generous distributions have more than made up for that drop. And besides, with the S&P 500 down more than 20%, that relatively insignificant loss is actually quite a good thing. What’s more, in 2022 SCM bumped up its payout from 9.3 cents per share at the end of 2021 to 11.3 cents per month at present. As an asset manager with a diverse portfolio of firms, SCM doesn’t depend on any one industry or company. That diversification means it is a well-built operation that should continue to throw off generous and reliable dividends.
Dividend yield: 8.9%
8 best monthly dividend stocks to buy now:
— Apple Hospitality REIT Inc. (APLE)
— EPR Properties (EPR)
— Gladstone Capital Corp. (GLAD)
— Horizon Technology Finance Corp. (HRZN)
— LTC Properties Inc. (LTC)
— PennantPark Floating Rate Capital (PFLT)
— SL Green Realty Corp. (SLG)
— Stellus Capital Investment Corp. (SCM)
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Update 10/20/22: This story was previously published at an earlier date and has been updated with new information.