7 Best Monthly Dividend Stocks to Buy Now

Cash in on annualized yields of as much as 19.8%.

The S&P 500 had a rough ride in 2022, losing more than 19% on the calendar year. And while the slump in big-name tech stocks like Amazon.com Inc. (AMZN) and Microsoft Corp. (MSFT) grabbed most of the headlines, it’s also worth noting that dividend stocks that were once thought of as low-risk investments took it hard on the chin, too. After all, why would investors want to settle for struggling consumer stocks that paid 2% or 3% dividends once bond yields became higher and have historically offered less volatility? Of course, not all stocks are created equal and there is a small group of companies that offer incredibly regular and generous paydays to investors. The following seven stocks all pay dividends once per month — and in most cases, offer a double-digit yield that bonds simply can’t match.

AGNC Investment Corp. (ticker: AGNC)

Say the four letters of this corporation’s name out loud and it becomes obvious that AGNC is a business that deals with agency mortgage loans. If you’re unfamiliar with the term, these are home loans subsidized by the Department of Housing and Urban Development through government agencies such as Fannie Mae, Ginnie Mae and Freddie Mac. That provides some structural support for AGNC even if the lenders themselves run into trouble. Furthermore, the nature of this company as a real estate investment trust, or REIT, further provides a bit of certainty for investors. All REITs must deliver 90% of taxable income back to shareholders, so as AGNC earns interest on the mortgages it also passes through a big share of those profits via its monthly dividends. Shares are up more than 40% in the last month after the uncertainty that dominated 2022 seems to have abated for this stock.

Forward dividend yield, based on 12 months of estimated payments: ?12.8%

Apple Hospitality REIT Inc. (APLE)

A REIT of a different type, Apple is a hotel operator with a diverse portfolio of upscale properties under the Marriott, Hilton and Hyatt brands. These locations span almost 90 different in-demand markets such as San Diego, New York City and Boca Raton, Florida. There’s lots of talk about a potential looming recession, but pent-up demand for travel in the wake of COVID-19 continues to drive strong bookings for Apple. In fact, shares are up about 12% in the last year while the S&P 500 has lost ground in the same period. Throw in the chance for continued upside in 2023 alongside a generous and consistent dividend and there’s reason to consider staying for a while in this hotel operator as you harvest monthly dividends.

Forward dividend yield:?5.5%

Armour Residential REIT Inc. (ARR)

Another mortgage-focused REIT on the rebound is ARR. It admittedly hasn’t performed as well as AGNC over the longer term, thanks to the fact that it suspended its dividend for two months during COVID-19 disruptions in 2020 and then resumed at a lower payout than its previous level. That made some investors wary of how Armour would respond to interest rate and housing market uncertainty last year. However, the stock has proven it has staying power and has managed to keep up its distributions. It just logged a three-month gain of about 15%, tripling the performance of the S&P 500 in the same period. There’s a bit more risk here, but with a forward dividend yield that’s nearly 20% there are some investors who may be willing to stick their necks out for this monthly dividend payer.

Forward dividend yield:?19.5%

Gladstone Capital Corp. (GLAD)

Gladstone is a financial firm that invests in debt securities of established but smaller or medium-sized companies that are looking for financing. There are risks to this model, particularly if you think economic growth is challenged, but with interest rates the highest since 2007 there’s much larger margins on these loans than in prior years. Besides, 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. Gladstone holdings include restaurants, manufacturers, chemical companies, education firms, telecommunications firms and businesses in many other sectors. The result is a diversified debt portfolio that delivers consistent payouts every month.

Forward dividend yield:?8.9%

LTC Properties Inc. (LTC)

LTC Properties is perhaps the most solid bet on this list because it’s focused on the recession-proof health care sector, and has a demographic megatrend behind it to boot. The company focuses on senior housing and skilled nursing facilities, which are in high demand in any economic environment. And with U.S. demographic projections showing the population of those ages 65 and older will more than double over the next 40 years, there is a steady flow of new “customers” to LTC properties. Thanks in part to this low-risk appeal, LTC has gained more than 8% in the last 12 months while the S&P 500 has moved by roughly the same amount in the wrong direction.

Forward dividend yield:?6%

Prospect Capital Corp. (PSEC)

Financial firm Prospect Capital makes its money through investments that include growth-oriented opportunities as well as distressed opportunities that are ripe targets for leveraged buyouts, restructurings and recapitalization. The leadership here has a long track record of success, paying monthly dividends ever since this company hit public markets in 2004. PSEC takes on companies in a wide array of sectors, including small financial services firms, health care providers, medical companies and manufacturers. There is volatility and risk in these investments individually, sure, but a broad and diversified portfolio has helped provide a steady stream of cash for reliable monthly payouts to shareholders.

Forward dividend yield:?9.7%

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. That’s because this firm invests in a narrow kind of real estate: free-standing, single-tenant commercial properties like that one CVS or Walmart near you. With big corporations backing long-term leases at these locations, there’s a lot of certainty in the operations of O stock. Shares are generally flat compared to 12 months ago but, since its October lows, Realty Income has gained more than 20% as of Jan. 31 — with the monthly dividend stream on top of that.

Forward dividend yield:?4.8%

7 best monthly dividend stocks to buy now:

— AGNC Investment Corp. (AGNC)

— Apple Hospitality REIT Inc. (APLE)

— Armour Residential REIT Inc. (ARR)

— Gladstone Capital Corp. (GLAD)

— LTC Properties Inc. (LTC)

— Prospect Capital Corp. (PSEC)

— Realty Income Corp. (O)

More from U.S. News

8 Best Warren Buffett Stocks to Buy in 2023

7 Stocks That Outperform in a Recession

6 Best Green Hydrogen Stocks and ETFs to Buy Now

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

Update 01/31/23: This story was previously published at an earlier date and has been updated with new information.

More from WTOP

Log in to your WTOP account for notifications and alerts customized for you.

Sign up