7 Best Monthly Dividend Stocks to Buy Now

Investors get monthly dividend payments from these stocks.

Dividends can be an excellent source of regular income for investors, especially during retirement. While most dividend stocks make their payouts on a quarterly basis, stocks that pay monthly dividends can be particularly appealing to investors who regularly incorporate those dividends into their household budgets. Stock prices can be unpredictable, but dividend payments from high-quality companies are reliable sources of cash flow no matter if the stock market goes up or down. Dividend stocks can also generate long-term upside for investors. These seven monthly dividend stocks have at least 5% yields and make payments about once every four weeks.

AGNC Investment Corp. (ticker: AGNC)

AGNC Investment is a mortgage real estate investment trust, or REIT. REITs are a type of corporate structure that receive certain tax benefits but are required to distribute 90% of taxable income to their investors. This mandate guarantees a relatively consistent dividend, which is reflected in AGNC’s regular 12-cent monthly payout. As a mortgage REIT, AGNC doesn’t invest in residential real estate directly. Instead, it buys mortgage-related securities, which are largely federal loans backed by government-sponsored enterprises, including Fannie Mae and Freddie Mac. Federal backing reduces the risk associated with these assets, giving income investors peace of mind.

Dividend yield: 17.3%

Prospect Capital Corp. (PSEC)

Prospect Capital is a business development company, or BDC. Prospect provides capital to middle-market companies and private equity financial sponsors for refinancing, leveraged buyouts, acquisitions and other purposes. Since 2004, Prospect has made more than 375 investments totaling more than $19.1 billion. Its current portfolio consists of 129 different companies spanning 40 different industries, providing investors with deep diversification. Like REITs, BDCs pay out at least 90% of their taxable profits as distributions to investors to maintain a lower corporate tax rate. Prospect has been public for 18 years, and it pays a consistent monthly distribution of six cents per share.

Dividend yield: 9.9%

Main Street Capital Corp. (MAIN)

Main Street Capital is another leading public BDC with a diversified portfolio, a proven track record and a lofty monthly distribution. Main Street has 195 cumulative investments and manages $5 billion in capital. The BDC focuses largely on debt investments in lower-middle-market companies that generate annual revenue of between $10 million and $150 million. In October 2007, MAIN shares traded at $15. In the 15 years since, Main Street has paid out more than $35 per share in distributions. In the third quarter, Main Street’s distributable net investment income per share exceeded its regular monthly dividends by more than 36%.

Dividend yield: 6.9%

LTC Properties Inc. (LTC)

LTC Properties is a REIT that owns and operates senior housing and health care properties. Senior housing facilities were hit particularly hard during the COVID-19 pandemic, and LTC shares are still down about 13% since the beginning of 2020. Despite the challenges, LTC maintained its 19-cent monthly dividend payment throughout the worst of the pandemic. As a result, LTC’s funds available for distribution, or FAD, payout ratio climbed to an uncomfortable 100% in the third quarter of 2021. However, that ratio has dropped to 88% as of the third quarter — a sign that business is now trending back in the right direction.

Dividend yield: 5.9%

Broadmark Realty Capital Inc. (BRMK)

Broadmark Realty Capital is a REIT that provides financial services for real estate investors and developers. The company offers short-term, first deed of trust loans backed by real estate to fund the acquisition, renovation or development of residential or commercial real estate. Since its inception in 2010, Broadmark has completed more than 2,000 transactions and deployed $4.1 billion in capital. The company has a $1.6 billion active, diversified loan portfolio with exposure to properties in 24 different U.S. states. The portfolio consists of 234 active loans with an average loan size of about $7 million.

Dividend yield: 15%

Ellington Financial Inc. (EFC)

Ellington Financial is a mortgage REIT that invests in residential loans, commercial mortgages and commercial loans. A large portion of its portfolio consists of residential mortgages. The company says it focuses on underserved, niche market segments where it believes it has identified market inefficiencies that provide opportunities for investment. Ellington switched to a monthly dividend payment in 2019, but it was forced to cut that monthly payment by nearly 50% in 2020. Ellington has since steadily built its dividend back up to its current level of 15 cents per share per month, in-line with pre-pandemic levels in 2019.

Dividend yield: 13.6%

EPR Properties (EPR)

EPR Properties is a specialty triple-net REIT focused on long-term leases on experiential real estate properties. EPR has more than $6.6 billion in investments diversified among more than 200 different tenants in 44 U.S. states. Movie theaters make up 41% of EPR’s earnings before interest, taxes, depreciation and amortization for real estate, or EBITDAre. Its other major revenue comes from eat and play establishments, ski resorts, and other attractions. Since November 1997, EPR has generated a total shareholder return of about 1,368%. The REIT pays a monthly 27.5-cent dividend.

Dividend yield: 8.4%

7 best monthly dividend stocks to buy now:

— AGNC Investment Corp. (AGNC)

— Prospect Capital Corp. (PSEC)

— Main Street Capital Corp. (MAIN)

— LTC Properties Inc. (LTC)

— Broadmark Realty Capital Inc. (BRMK)

— Ellington Financial Inc. (EFC)

— EPR Properties (EPR)

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

Update 11/07/22: This story was previously published at an earlier date and has been updated with new information.

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