In the current market environment, with the 10-year Treasury yielding about 4.5% and the typical stock in the S&P 500 yielding only 1.6%, it’s getting harder for many investors to be satisfied with the income provided by the most popular blue-chip dividend stocks. And with the broader stock market really struggling over the last three months or so, there’s also reason to worry whether it’s time to get defensive as the year comes to a close.
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When it comes to monthly dividend stocks, investors look for two things: consistency and yield. But while their payouts come more regularly and often with bigger annualized yields than their large-cap counterparts, monthly dividend stocks tend to be very unique — and come with their own unique risks.
The following stocks all pay dividends once per month, and all yield more than 7.4%. But investors should do their research before buying to ensure they understand the elevated risk profile that comes with some of these more aggressive picks right now.
| Stocks | Market Capitalization | Trailing Dividend Yield (as of Nov. 14) |
| Ellington Financial Inc. (ticker: EFC) | $893 million | 13.4% |
| EPR Properties (EPR) | $3.5 billion | 7.1% |
| Gladstone Capital Corp. (GLAD) | $441 million | 9.2% |
| Horizon Technology Finance Corp. (HRZN) | $412 million | 10.6% |
| PennantPark Floating Rate Capital Ltd. (PFLT) | $637 million | 11% |
| Prospect Capital Corp. (PSEC) | $2.4 billion | 12.4% |
| SL Green Realty Corp. (SLG) | $2.2 billion | 9.5% |
Ellington Financial Inc. (EFC)
Ellington Financial is a mortgage-related monthly dividend stock, managing a portfolio of residential mortgage-backed securities that are typically backstopped by U.S. government entities like Fannie Mae or Freddie Mac. Obviously, real estate markets have seen plenty of challenges over the last year or so as rising interest rates have weighed on mortgage demand. But mortgage-related companies are in double trouble thanks to this trend because they sometimes borrow heavily to invest in that mortgage paper.
A host of EFC’s peers have been very volatile lately, losing 25% or even more in the last year. But EFC has held firm and its shares are effectively flat year to date — and considering its tremendous yield and monthly dividends, income investors may consider this mortgage-related play worth their time despite the risks.
Market capitalization: $893 million Trailing dividend yield: 13.4%
EPR Properties (EPR)
While some of the monthly dividend stocks on this list have seen shares slump slightly year to date, EPR stands out as being one of the top performing stocks of any flavor. It has jumped by nearly 25% since Jan. 1 to more than double the returns of the broader S&P 500 index and simply trounces other dividend stocks out there regardless of their yield. This commercial real estate company specializes in resorts, theaters and “eat-and-play” properties that marry restaurants with golf or video games. EPR tenants are seeing strong demand amid resilient consumer spending, which has resulted in a surging share price as well as generous monthly dividends.
Market capitalization: $3.5 billion Trailing dividend yield: 7.1%
Gladstone Capital Corp. (GLAD)
Gladstone Capital operates as a business development company, a firm that operates much like a hedge fund or private equity fund by putting cash behind other businesses and deriving its success based on the performance of those underlying investments. With a share price that has moved slightly higher since January, GLAD is a stock that has managed to hang tough in an otherwise challenging environment for similar companies. That’s in part because of a Goldilocks approach that focuses on lower middle-market companies that are on the small side but definitely not startups in someone’s garage.
Specifically, GLAD makes investments of about $30 million or less. Its broad portfolio includes aerospace companies, restaurants, energy firms, health care companies and much more. This diversification has helped smooth out some bumps in the road this year, and allows for consistent and generous monthly dividend payments.
Market capitalization: $441 million Trailing dividend yield: 9.2%
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Horizon Technology Finance Corp. (HRZN)
Monthly dividend stock Horizon is not exactly a high-growth technology investment like a small-cap software company. Rather, HRZN is a financial firm that invests its assets in those companies — mainly innovative life sciences and biotech firms, digital media firms, alternative energy companies and more. As these high-potential startups grow and succeed, Horizon gets a good return on its capital that it can then share back to investors via regular and generous dividends of 11 cents each month — and even a special dividend of 5 cents per share scheduled for December on top of that payout, thanks to a successful 2023.
There’s a bit more risk here than in slow-and-steady real estate investments, but the income potential definitely makes Horizon worth a look.
Market capitalization: $412 million Trailing dividend yield: 10.6%
PennantPark Floating Rate Capital Ltd. (PFLT)
PennantPark is a monthly dividend stock with a unique value proposition right now. PFLT specializes in “floating rate” loans, which means the interest paid on those debts varies based on the broader market environment — and as the Federal Reserve has moved rates higher, the loans in its portfolio have been able to generate bigger payments, too.
The downside is that higher payments mean more stress for borrowers and an elevated risk of default. That said, PFLT is down only slightly since Jan. 1 and offers a tremendous yield right now, so it could be worth a look.
Market capitalization: $637 million Trailing dividend yield: 11%
Prospect Capital Corp. (PSEC)
Prospect Capital is another business development corporation, or BDC, that derives its profits based on the success of that investment portfolio. PSEC’s investments tend to be focused on later-stage opportunities including leveraged buyouts and restructurings as well as middle-market companies with growth potential.
With more than 35 years of experience and a track record of more than 400 different investments funded, this is an experienced BDC that knows how to identify opportunities. It’s also a proven income investment that has paid those monthly dividends uninterrupted ever since this company hit public markets in 2004.
Market capitalization: $2.4 billion Trailing dividend yield: 12.4%
SL Green Realty Corp. (SLG)
One of the poorer-performing stocks on this list, SL Green is down about 10% year to date in 2023. However, on the plus side it’s also up almost 90% from its 52-week low. As one of Manhattan’s largest office landlords with tier 1 properties on Madison Avenue and Park Avenue, SLG commands more than 33 million square feet of commercial space.
Fears of a long-term trend toward remote work and low occupancies have created some volatility, but SLG offers a strong portfolio of attractive assets as well as a tremendous and consistent yield. It’s riskier than some other picks on this list, but it’s still one of the best monthly dividend stocks to consider right now.
Market capitalization: $2.2 billion Trailing dividend yield: 9.5%
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Update 11/15/23: This story was previously published at an earlier date and has been updated with new information.
