When someone needs money, they tend not to like being kept waiting. What if your boss told you that your paycheck would only come every couple of months instead of every other week? It probably wouldn’t go over too well…
We all have bills to pay and would appreciate a timely payment schedule – preferably as often as possible.
That’s one common complaint about dividend stocks. Most of them typically pay quarterly – and some bi-annually – so investors only see those checks hit their account a couple of times a year.
But there are actually over 60 stocks that will deliver those checks every month like clockwork. However, you can’t just toss a dart at one of them and expect the checks to start flying in. There are wildly different companies that make up the list, and you need to know how and why they can afford to pay dividends every month.
Before We Get Started…
You’ll notice that many of the following companies are REITs (who are required to pay 90% of their earnings to shareholders) and MLPs (specialized oil and gas companies) which have similar requirements. But not all of them are created equal.
For example, Alpine Summit Energy Partners (NYSE: ALP) is an oil and gas exploration company whose dividend is currently yielding a staggering 33%. That is simply unsustainable. The stock is down to under a buck after topping out at $6.00 over the past year.
(Editor’s note: There is a simple correlation between dividend yield and stock price, which I've explained in detail here).
Global Water Resources (NYSE: GWRS), however, yields much less at 2.4%. That’s because it is a very predictable utility company that can easily maintain a dividend of that size and send you a monthly check. It just won’t be as large as some of the other options.
You can get the best of both worlds with these three safe, highest-yielding stocks that deliver distributions each month.
EPR Properties (NYSE: EPR)
Yield: 8.5%
EPR Properties is a premier entertainment REIT with a high-yield monthly dividend. They refer to themselves as an “experiential” company with a focus on human experiences.
It sports a $6.6 billion portfolio in over 350 different entertainment properties across the country, everything from movie theaters and casinos to water parks and museums.
This makes it nicely diversified compared to REITs that only specialize in, say, health care or shopping malls.
The company did take a hit during the pandemic when entertainment venues were basically shuttered. They even had to suspend their monthly dividend for about a year. Thankfully they reinstated it in the second half of 2021, and looks to be in solid shape.
One reason the dividend is so high is that EPR’s share price has dropped over the past few years. The stock is trading on the low end of its 52-week range, which looks to be value pricing for the long term.
Now that entertainment venues are in a post-pandemic boom, EPR has been posting much better numbers. They reported their Q4 and FY 2022 results last month, which displayed some promise. Fourth-quarter funds from operation (FFO) were at $1.27 per share, which beat expectations by $0.09.
(Editor’s Note: Funds from operations is a closely watched measure in the REIT industry. It takes net income and adds back items such as depreciation and amortization.)
Revenue was also 15% higher year-over-year.
EPR Properties has managed to grow earnings per share (EPS) by 5.9% per year over the last three years. That’s encouraging, considering how volatile the entertainment world became during COVID.
Another important factor for monthly dividend investors is that EPR has a dividend reinvestment plan (DRIP) which allows you to reinvest your dividends and take a long-term position that keeps growing. If you invest $10,000 in common shares, EPR will provide you with up to a 5% discount on your share purchase.
Stats
Market Cap: $2.76 billion
FFO: $1.35 per share
PE Ratio: 18.18
EPS: 2.02
Dividend Yield: 8.5%
52-Week Range: $34.58 – $56.38
STAG Industrial (NYSE: STAG)
Yield: 4.52%
STAG Industrial is a REIT focused on acquiring and operating industrial properties throughout the United States. The company owns and operates 563 warehouses – 116 million square feet worth – across 41 states.
They are particularly heavy in e-commerce, which accounts for 40% of their business.
The company owns and rents the warehouses where some of the biggest e-commerce giants house their wares. Amazon makes up the biggest of STAG’s customers.
STAG is also very diversified, which is crucial in the industrial space. They have holdings in over 45 different industries – tires, metal, mattresses, books – and over 60 markets. STAG also holds $17.8 million in cash reserves and $877 million in undrawn “revolver” balance.
The company’s focus on single-tenant properties means that it spreads out the single-tenant risk over a large portfolio – which makes it more stable than REITs focused on private owners, which may hold just one or a handful of properties. STAG has more eggs in its basket, which makes losing a tenet far less important.
Not to mention that their 99% occupancy rate is one of the best in the sector.
As far as their excellent 4.52% monthly dividend yield goes, it’s been one of the most solid around. They have been able to grow that dividend every year since 2011. They also grow that dividend slowly at a rate of 0.8% annually, which may not sound sexy, but it just sounds sound.
Investors seem to agree, as analysts also have a consensus “buy” rating with an average price target of $37 within the next year. STAG is currently trading around $32, giving you some nice upside, all while collecting monthly dividends.
Stats
Market Cap: $5.9 billion
FFO: $2.25 per share
PE Ratio: 32.21
EPS: 1.00
Dividend Yield: 4.52%
52-Week Range: $26.56 – $42.49
Gladstone Land (NYSE: LAND)
Yield: 3.42%
I’ve written to you before about the benefits of farmland REITs. You know what they say, “buy land, they aren’t making it anymore.”
Farmland REITs are rather simple in practice: the company will acquire the land necessary for farming and lease it to the farmer in a long-term lease. They can also provide capital to farmers to expand their operations, increasing the property's value for both the company and the farmer.
The prices of farmland have skyrocketed in recent years, as you can see below:
That’s good news for companies that own a lot of land.
Gladstone Land is perhaps the best-known farmland REIT and the only one that offers monthly dividends.
Gladstone Land (NYSE: LAND) is the largest farmland REIT out there – they own 164 farms with 113,000 acres in 15 states worth $1.5 billion in total. Gladstone has also made monthly dividend payments consistently since its IPO in 2013. The company has increased those dividend payments 26 times over the past 29 quarters.
That is to say, Gladstone Land is a solid farmland REIT. Heck, it’s right there in the ticker symbol.
Gladstone Land's farms are predominantly located in regions where its tenants are able to grow fresh produce annual row crops, such as berries and vegetables, which are generally planted and harvested annually. They also own farms that produce almonds, apples, cherries, and olives. Gladstone even owns vineyards.
That isn’t to say it’s without any risk. In a rising interest rate world, any REIT has to be more conservative with its acquisitions. While Gladstone did acquire five new farms last year, consisting of 3,189 gross acres in five different states for a total of approximately $65.1 million, they plan to be more conservative this year.
However, the inflationary environment – though bad for consumers at the grocery store, is actually good for farmland REITs since the bounties from the farm can be sold at higher rates.
The company is currently paying out a 3.42% yield on its dividend, which is not only generous but relatively safe.
For new investors, you may be looking at quite an opportunity in the fact that Gladstone is trading at a 40% discount from their 52-week highs.
I would treat Gladstone as a long-term dividend payer that has consistently shown its ability to deliver payments monthly.
Stats
Market Cap: $568.23 million
FFO: $0.20 per share
Dividend Yield: 3.42%
52-Week Range: $26.56 – $42.49
To Cash, or Not to Cash?
So there you have it, three stocks that will deliver you a monthly income for as long as you hold them. Depending on your situation, you may want to use that income for day-to-day expenses. However, I would seriously consider reinvesting those dividends to supercharge your returns.
It’s very satisfying to watch your monthly payouts compound in your portfolio.
You can easily set up dividend reinvestment through your broker to ensure your best return. But let’s say you need extra cash one month, you have an emergency, or you have enough to retire. You simply stop the reinvestment program, and you’ll start receiving your payouts the next month – instead of having to wait until the next quarter with typical dividend stocks.
No matter what you choose, every portfolio should be loaded with dividend stocks, and the monthly ones give you more flexibility.
The checks are yours to do with them what you please.
Godspeed,
Jimmy Mengel
The Profit Sector
Follow me on Twitter @mengeled
