Although passive income represents an important component of the broader investing space, not all assets are built the same, as monthly dividend stocks confirm. While enterprises that pay out earnings to shareholders often do so on a quarterly basis, the reality is that most bills come in monthly. That’s the obvious advantage of this distinct investment class.
Another benefit tipping the scales in favor of monthly dividend stocks comes down to math. Because of the regular cash flow, investors can potentially compound their growth quicker. Basically, you can take your monthly passive income and reinvest it, allowing you the opportunity to expand your portfolio. As well, you can take advantage of new prospects that materialize rather than waiting every three months. To be fair, some of the options may be limited if you’re exclusively focused on monthly paying companies. Still, for help with your frequent obligations, these monthly dividend stocks bring much to the table.
|HFRO||Highland Income Fund||$10.58|
|PVL||Permianville Royalty Trust||$3.06|
Realty Income (O)
A real-estate investment trust (REIT), Realty Income (NYSE:O) invests in free-standing, single-tenant commercial properties in the U.S., Spain and the U.K. According to its website, Realty features $32.9 billion in property level acquisition volume since 2010. Further, more than 80% of acquisition volume is relationship driven. Presently, the company carries a market capitalization of $42.63 billion. Financially, Realty focuses on its growth initiatives. Presently, its three-year revenue growth rate stands at 3.1%, beating out over 64% of the competition. Also, its book growth rate during the aforementioned period pings at 16.7%, above over 92% of sector players. As well, Wall Street analysts rate Realty as a consensus moderate buy.
To be sure, analysts only anticipate 2% upside growth for O in the charts. However, the company’s forward yield stands at 4.39%. As well, it enjoys 29 years of consecutive annual dividend increases, making it one of the top monthly dividend stocks.
LTC Properties (LTC)
A REIT specializing in the senior care industry, LTC Properties (NYSE:LTC) invests in seniors housing and health care primarily through sale-leasebacks, mortgage financing, joint-ventures, construction financing and structured finance solutions. Further, LTC’s website notes that its portfolio splits roughly 50/50 between senior housing and skilled nursing properties.
Fiscally, LTC’s strengths lie in the bottom line. Most notably, the company’s gross margin stands at 90.5%, ranking above nearly 88% of its rivals. As well, the firm’s return on equity pings at 12.42%, beating out over 72% of sector players. In addition, this figure reflects superior capacity to convert equity financing into profits. However, investors should note that among Wall Street analysts, LTC carries a hold consensus view.
Still, the regular passive income may attract market participants regardless. Presently, LTC carries a forward yield of 6%. Conspicuously, this ranks above the real estate sector’s average yield of 4.46%, making it one of the monthly dividend stocks to consider.
Stag Industrial (STAG)
Based in Boston, Massachusetts, Stag Industrial (NYSE:STAG) is a REIT focused on the acquisition and operation of industrial properties throughout the U.S. In 2021, per its website, Stag invested $1.3 billion, acquiring a total of 74 buildings. In terms of square footage, it acquired 12.9 million. Presently, the company commands a market cap of $6.37 billion.
With Stag’s facilities largely dependent on e-commerce, it’s not terribly surprising that STAG dipped nearly 12% in the trailing year. Still, since the start of the year, shares gained almost 10%. Fundamentally, Stag benefits from its growth initiatives. For instance, the company’s three-year free cash flow (FCF) growth rate stands at 8.3%, beating out nearly 68% of its peers. Also, its book growth rate during the same period stood at 10.9%, outpacing 84% of the competition.
At the moment, Wall Street analysts rate STAG as a consensus moderate buy with an implied upside target of almost 5%. This projected growth combines well with Stag’s 4.14% forward yield, making it one of the monthly dividend stocks to buy.
EPR Properties (EPR)
Headquartered in Kansas City, Missouri, EPR Properties (NYSE:EPR) is a REIT that invests in amusement parks, movie theaters, ski resorts and other entertainment properties. According to its public profile, EPR owned 353 properties as of last year. Right now, the company carries a market cap of $3.2 billion.
Because of the revenge travel phenomenon, EPR didn’t quite enjoy a consistently strong performance in 2022. In the trailing year, shares declined by a little over 1%. With other countries opening their economies, consumers had an incentive to take that long-delayed exotic vacation. However, with prices skyrocketing well above historical norms, people may seek cheaper entertainment options such as movie theaters.
Narrative wise, this should bode well for EPR, making it one of the monthly dividend stocks to buy. Another factor helping the cause is the very generous payout. Currently, EPR carries a forward yield of 7.85%, well above the real estate sector’s aforementioned average yield of 4.46%.
Sabine Royalty Trust (SBR)
For those that want to take the scenic road regarding monthly dividend stocks, Sabine Royalty Trust (NYSE:SBR) may be to your liking. Per its website, Sabine is an express trust focused on undeveloped oil and gas properties. These projects are located in Florida, Louisiana, Mississippi, New Mexico, Oklahoma and Texas.
According to Investopedia, “[r]oyalty trusts offer investors higher yields than stocks, even though they trade alike. As well, “[r]oyalty trusts offer tax-advantaged yields to investors because the IRS doesn’t recognize distributions from these vehicles as taxable events.”
Two factors immediately bolster the fundamentals for Sabine Royalty. Number one, the ongoing geopolitical flashpoint in Europe – along with China’s reopening – poses potential upside pricing pressures. Second, costly alternatives such as electric vehicles will keep hydrocarbons relevant. Per Dividend.com, SBR offers a forward yield of 8.7%. While it might not be everyone’s cup of tea, the payout could make SBR worth consideration among monthly dividend stocks.
Highland Income Fund (HFRO)
For another alternative in high-yielding monthly dividend stocks, intrepid investors may want to consider Highland Income Fund (NYSE:HFRO). A closed-end fund managed by NexPoint Asset Management, HFRO seeks to provide a high level of current income, consistent with the preservation of capital. In the trailing year, HFRO lost over 4% although it’s back in the black on a year-to-date basis.
According to a Seeking Alpha article, an investment like HFRO makes sense due to the present economic backdrop. Basically, with soaring inflation raising the cost of living, investors have become desperate for income. Further, the article states that the fund heavily invests in floating-rate securities, which may hold their value better than traditional bonds under a rising interest rate environment.
Admittedly, HFRO won’t be for everyone. That said, Highland Income offers a forward yield of 8.73%. That’s dramatically higher than the financial sector’s average yield of 3.18%. Therefore, any “desperate” investors should consider HFRO as one of the monthly dividend stocks to buy.
Permianville Royalty Trust (PVL)
Arguably the riskiest name on this list of monthly dividend stocks, Permianville Royalty Trust (NYSE:PVL) won’t be for the weak of heart. As an example, PVL gained slightly over 39% in the trailing year. So far, so good. However, in the trailing five years, shares suffered a near-3% loss. Basically, PVL runs all over the map, which makes it an adventure.
A Delaware statutory trust, Permianville focuses on the sale of oil and natural gas production from primarily non-operated assets of both conventional properties. These projects are located in Texas, Louisiana and New Mexico. Finally, the company features unconventional assets in the Permian and Haynesville basins.
Here’s the kicker. Right now, Dividend.com notes that PVL offers a forward yield of 21.96%. Of course, that’s well above the energy sector’s average yield of 4.24%. However, this is a very risky venture so only intense gamblers of monthly dividend stocks need apply.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.