In this article, we will be looking at the 10 best high-yield monthly dividend stocks to buy.
Dividend stocks are among those stocks that have the potential to greatly impact not only an investor’s portfolio but even the stock market at large. According to Schroders, for instance, reinvesting dividends can result in a massive upgrade in returns, if done so for a certain number of years. Schroders has estimated that an investment of about $1,000 made in the MSCI World during the early 1990s would generate a return of $6,416 or grow at a rate of about 8.3%, by 2018. And while past performance can not be taken as irrefutable proof that the same pattern will repeat again, it is enough to build the case for dividend investing.
A report published by Robeco has taken this case a step further. After studying stock performance from as far back in time as 1900 to 2018, the study found that of the total return from equities of 9.5%, about 4.5% came from dividends alone, and dividends managed to deliver stable and positive returns during every decade from the 1990s to the 2000s. The study also pointed out that among various investment strategies, the risk associated with a high-dividend investment strategy is about 20% lower, while high-dividend stocks are also responsible for generating higher returns than normal stocks. Over the time period studied, high-dividend stock returns were about 4% higher than stock returns from non-dividend paying stocks, for instance.
To hit the nail on the head, the fact that in light of financial volatility, unemployment concerns, and an inflation scare, more people are looking for safe and stable dividend stocks with or without high yields is becoming clearer by the day. Katie Nixon, the chief investment officer for wealth management Northern Trust, has also reportedly commented that we can expect dividends to continue rising higher than the rate of inflation for the next couple of years, something that will ensure that investors seeking to generate a cash flow for themselves will be given the opportunity to do just that. In fact, investors like Burns McKinney from the NFJ Investment Group are even going so far as to consider companies that reportedly cut or suspended their dividends when the pandemic hit, expecting that they will restart their dividends and be among the companies keeping up with inflation, while their shareholders will be the ones to get “rewarded.” In light of all these developments then, dividend stocks like McDonald’s Corporation (NYSE: MCD), The Coca-Cola Company (NYSE: KO), PepsiCo, Inc. (NASDAQ: PEP), and Colgate-Palmolive Company (NYSE: CL) and others can be considered good investment options.
In this article, our focus would be on stocks that pay dividends monthly with decent yields.
Investing is becoming difficult by the day, even for the smart money. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26th 2021 our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
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Without further ado, let’s look at the 10 best high-yield monthly dividend stocks to buy. The stocks added to our list below were selected on the basis of hedge fund sentiment, analysts’ ratings, fundamentals, and growth potential based on core business strengths.
Best High-Yield Monthly Dividend Stocks To Buy
10. Main Street Capital Corporation (NYSE: MAIN)
Number of Hedge Fund Holders: 10
Dividend Yield: 5.95%
Main Street Capital Corporation (NYSE: MAIN) is a private equity firm specializing in equity capital to lower middle market companies. It ranks 10th on our list of the best high-yield monthly dividend stocks to buy.
In June, Main Street Capital Corporation (NYSE: MAIN) completed its follow-on investment in a company totally about $23.6 million in the first lien. The company’s shares were also upgraded to Outperform with a $41 price target by Raymond James this March.
In the first quarter of 2021, Main Street Capital Corporation (NYSE: MAIN) had an NII of $0.58, beating estimates by $0.03. The company’s TII was $62.81 million, up 11.86% year over year and beating estimates by $4.04 million. Main Street Capital Corporation (NYSE: MAIN) has also gained 26.48% in the past 6 months and 31.80% year to date.
By the end of the first quarter of 2021, 10 hedge funds out of the 866 tracked by Insider Monkey held stakes in Main Street Capital Corporation (NYSE: MAIN) worth roughly $33.9 million. This is compared to 7 hedge funds in the previous quarter with a total stake value of approximately $42.7 million.
Like McDonald’s Corporation (NYSE: MCD), The Coca-Cola Company (NYSE: KO), PepsiCo, Inc. (NASDAQ: PEP), and Colgate-Palmolive Company (NYSE: CL), Main Street Capital Corporation (NYSE: MAIN) is a good dividend stock to invest in.
9. Pembina Pipeline Corporation (NYSE: PBA)
Number of Hedge Fund Holders: 15
Dividend Yield: 6.16%
Pembina Pipeline Corporation (NYSE: PBA) is a provider of transportation and midstream services for the energy industry. It ranks 9th on our list of the best high-yield monthly dividend stocks to buy.
In June Pembina Pipeline Corporation (NYSE: PBA) shares were upgraded to Outperformer with a raised price target of approximately $37.3 at CIBC, while in the same month, National Bank also raised its price target on Pembina Pipeline Corporation (NYSE: PBA) shares to approximately $31.80, keeping a Sector Perform rating on the shares.
In the first quarter of 2021, Pembina Pipeline Corporation (NYSE: PBA) had an EPS of $0.44, missing estimates by $0.06, while the company’s revenue was $1.68 billion, up 40.68% year over year and beating estimates by $321.64 million. Pembina Pipeline Corporation (NYSE: PBA) has also gained about 10% in the past 6 months and 30.08% year to date.
By the end of the first quarter of 2021, 15 hedge funds out of the 866 tracked by Insider Monkey held stakes in Pembina Pipeline Corporation (NYSE: PBA) worth roughly $74.8 million. This is compared to 13 hedge funds in the previous quarter with a total stake value of approximately $61.6 million.
Like McDonald’s Corporation (NYSE: MCD), The Coca-Cola Company (NYSE: KO), PepsiCo, Inc. (NASDAQ: PEP), and Colgate-Palmolive Company (NYSE: CL), Pembina Pipeline Corporation (NYSE: PBA) is a good dividend stock to invest in.
8. Gladstone Commercial Corporation (NASDAQ: GOOD)
Number of Hedge Fund Holders: 7
Dividend Yield: 6.62%
Gladstone Commercial Corporation (NASDAQ: GOOD) is a REIT that acquires, owns, and operates net leased industrial and office properties in the US. The company ranks 8th on our list of the best high-yield monthly dividend stocks to buy.
This June, B. Riley’s Craig Kucera raised the price target on Gladstone Commercial Corporation (NASDAQ: GOOD) shares from $23 to $25, reiterating a Buy rating on the stock. Kucera added that REITs seem to be more positive on economic recovery and business trends now, after NAREIT’s REITweek.
In the first quarter of 2021, Gladstone Commercial Corporation (NASDAQ: GOOD) had an FFO of $0.42, beating estimates by $0.04. The company’s revenue was $34.68 million, up 3.15% year over year and beating estimates by $1.21 million. Gladstone Commercial Corporation (NASDAQ: GOOD) has also gained 22.11% in the past 6 months and 28.47% year to date.
By the end of the first quarter of 2021, 7 hedge funds out of the 866 tracked by Insider Monkey held stakes in Gladstone Commercial Corporation (NASDAQ: GOOD) worth roughly $49.3 million. This is compared to 9 hedge funds in the previous quarter with a total stake value of approximately $51.04 million.
Like McDonald’s Corporation (NYSE: MCD), The Coca-Cola Company (NYSE: KO), PepsiCo, Inc. (NASDAQ: PEP), and Colgate-Palmolive Company (NYSE: CL), Gladstone Commercial Corporation (NASDAQ: GOOD) is a good dividend stock to invest in.
7. Gladstone Capital Corporation (NASDAQ: GLAD)
Number of Hedge Fund Holders: 5
Dividend Yield: 6.81%
Gladstone Capital Corporation (NASDAQ: GLAD) is a company operating in the asset management and custody banks industry as a private equity and venture capital fund specializing in the lower middle market, growth capital, add-on acquisitions, and other related areas. It ranks 7th on our list of the best high-yield monthly dividend stocks to buy.
This June, Oppenheimer’s Mitchel Penn initiated coverage of Gladstone Capital Corporation (NASDAQ: GLAD) shares with a Perform rating and a $10 price target. Penn also commented that Gladstone Capital Corporation (NASDAQ: GLAD) can be expected to earn about 11% in ROE.
In the fiscal second quarter of 2021, Gladstone Capital Corporation (NASDAQ: GLAD) had an NII of $0.20, in line with estimates. The company’s TII was $12.88 million, up 12.12% year over year but missing estimates by $51,000. Gladstone Capital Corporation (NASDAQ: GLAD) has also gained 22.07% in the past 6 months and 31.46% year to date.
By the end of the first quarter of 2021, 5 hedge funds out of the 866 tracked by Insider Monkey held stakes in Gladstone Capital Corporation (NASDAQ: GLAD) worth roughly $1.91 million. This is compared to 6 hedge funds in the previous quarter with a total stake value of approximately $3.03 million.
Like McDonald’s Corporation (NYSE: MCD), The Coca-Cola Company (NYSE: KO), PepsiCo, Inc. (NASDAQ: PEP), and Colgate-Palmolive Company (NYSE: CL), Gladstone Capital Corporation (NASDAQ: GLAD) is a good dividend stock to invest in.
6. SLR Senior Investment Corp. (NASDAQ: SUNS)
Number of Hedge Fund Holders: 3
Dividend Yield: 7.86%
SLR Senior Investment Corp. (NASDAQ: SUNS) is a business development fund that operates in investing in leveraged, middle-market companies in the US, and it ranks 6th on our list of the best high-yield monthly dividend stocks to buy.
This June, Oppenheimer analyst Mitchel Penn began covering SLR Senior Investment Corp. (NASDAQ: SUNS) shares with an Outperform rating and a $16 price target.
SLR Senior Investment Corp. (NASDAQ: SUNS) has about $244.91 million in assets under management and its price returns in the past year were up 21.59%, versus the S&P 500’s price returns of 35.13%. The fund’s total returns in the past year were more than the S&P 500’s total returns, however, having risen by 32.01% versus the latter’s 10.4% rise. SLR Senior Investment Corp. (NASDAQ: SUNS) has also gained 20.44% in the past year.
By the end of the first quarter of 2021, 3 hedge funds out of the 866 tracked by Insider Monkey held stakes in SLR Senior Investment Corp. (NASDAQ: SUNS) worth roughly $2.22 million. This is compared to 3 hedge funds in the previous quarter with a total stake value of approximately $1.74 million.
Like McDonald’s Corporation (NYSE: MCD), The Coca-Cola Company (NYSE: KO), PepsiCo, Inc. (NASDAQ: PEP), and Colgate-Palmolive Company (NYSE: CL), SLR Senior Investment Corp. (NASDAQ: SUNS) is a good dividend stock to invest in.
5. PennantPark Floating Rate Capital Ltd. (NASDAQ: PFLT)
Number of Hedge Fund Holders: 7
Dividend Yield: 8.7%
PennantPark Floating Rate Capital Ltd. (NASDAQ: PFLT) is a company operating in the financials sector as a business development entity. It makes secondary direct, debt, equity, and loan investments and ranks 5th on our list of the best high-yield monthly dividend stocks to buy.
This July, Oppenheimer’s Mitchel Penn began covering PennantPark Floating Rate Capital Ltd. (NASDAQ: PFLT) shares with a Perform rating and a $13 price target, adding that he expected the company to earn a 9% ROE. Ladenburg also has a Buy rating on PennantPark Floating Rate Capital Ltd. (NASDAQ: PFLT) shares.
In the fiscal second quarter of 2021, PennantPark Floating Rate Capital Ltd. (NASDAQ: PFLT) had an NII of $0.26, missing estimates by $0.01. The company’s TII was $19.44 million, also missing estimates by $1.08 million. PennantPark Floating Rate Capital Ltd. (NASDAQ: PFLT) has gained 19.03% in the past 6 months and 26.20% year to date.
By the end of the first quarter of 2021, 7 hedge funds out of the 866 tracked by Insider Monkey held stakes in PennantPark Floating Rate Capital Ltd. (NASDAQ: PFLT) worth roughly $10.4 million. This is compared to 7 hedge funds in the previous quarter with a total stake value of approximately $10.9 million.
4. Prospect Capital Corporation (NASDAQ: PSEC)
Number of Hedge Fund Holders: 7
Dividend Yield: 8.85%
Prospect Capital Corporation (NASDAQ: PSEC) is a business development company headquartered in New York, and it ranks 4th on our list of the best high-yield monthly dividend stocks to buy.
This June, Prospect Capital Corporation (NASDAQ: PSEC) stated that it had funded about $55 million for a first lien senior secured floating rate term loan for the acquisition of Enseo Holdings.
In the fiscal third quarter of 2021, Prospect Capital Corporation (NASDAQ: PSEC) had an NII of $0.19, beating estimates by $0.02. The company’s TII was $159.46 million, up 3.21% year over year and beating estimates by $8.32 million. Prospect Capital Corporation (NASDAQ: PSEC) has also gained 34.10% in the past 6 months and 47.73% year to date.
By the end of the first quarter of 2021, 7 hedge funds out of the 866 tracked by Insider Monkey held stakes in Prospect Capital Corporation (NASDAQ: PSEC) worth roughly $11.6. This is compared to 8 hedge funds in the previous quarter with a total stake value of approximately $18.3 million.
3. AGNC Investment Corp. (NASDAQ: AGNC)
Number of Hedge Fund Holders: 18
Dividend Yield: 8.91%
AGNC Investment Corp. (NASDAQ: AGNC) is a US-based real estate investment trust. It ranks 3rd on our list of the best high-yield monthly dividend stocks to buy.
This June, Piper Sandler kept its Overweight rating on AGNC Investment Corp. (NASDAQ: AGNC) shares alongside an $18.50 price target. Analyst Kevin Barker also made positive comments regarding the safety of the company’s dividend yield in light of a positive earnings report.
In the first quarter of 2021, AGNC Investment Corp. (NASDAQ: AGNC) had an FFO of $0.76, beating estimates by $0.13. The company’s revenue was $528 million, up 712.31% year over year and beating estimates by $244.78 million. AGNC Investment Corp. (NASDAQ: AGNC) has also gained about 2.34% in the past 6 months and 5% year to date.
By the end of the first quarter of 2021, 18 hedge funds out of the 866 tracked by Insider Monkey held stakes in AGNC Investment Corp. (NASDAQ: AGNC) worth roughly $167 million. This is compared to 25 hedge funds in the previous quarter with a total stake value of approximately $353 million.
2. Ellington Financial Inc. (NYSE: EFC)
Number of Hedge Fund Holders: 6
Dividend Yield: 10.10%
Ellington Financial Inc. (NYSE: EFC) operates in the acquisition of financial assets in the US through Ellington Financial Operating Partnership LLC. It ranks 2nd on our list of the best high-yield monthly dividend stocks to buy.
BTIG has a Buy rating on Ellington Financial Inc. (NYSE: EFC) alongside a $19 price target as of this May, with analyst Eric Hagen seeming optimistic on the stock.
In the first quarter of 2021, Ellington Financial Inc. (NYSE: EFC) had an FFO of $0.43, higher than the previous quarter’s FFO of $0.37, while its revenue was $40.08 million, also surpassing the previous quarter’s $39.07 million revenue. Ellington Financial Inc. (NYSE: EFC) has also gained 15.7% in the past 6 months and 22.12% year to date.
By the end of the first quarter of 2021, 6 hedge funds out of the 866 tracked by Insider Monkey held stakes in Ellington Financial Inc. (NYSE: EFC) worth roughly $38.6 million. This is compared to 9 hedge funds in the previous quarter with a total stake value of approximately $40.4 million.
1. Orchid Island Capital, Inc. (NYSE: ORC)
Number of Hedge Fund Holders: 8
Dividend Yield: 15.35%
Orchid Island Capital, Inc. (NYSE: ORC) operates in the mortgage REIT industry as a specialty finance company, investing in residential mortgage-backed securities in the US. It ranks 1st on our list of the best high-yield monthly dividend stocks to buy.
This April, Orchid Island Capital, Inc. (NYSE: ORC) saw its quarterly EPS view of an estimated $0.60 per share, and an estimated total return on equity of 6%.
In the first quarter of 2021, Orchid Island Capital, Inc. (NYSE: ORC) had an FFO of $0.25, missing estimates by $0.02. The company’s revenue was $24.91 million, up 30.12%% year over year and beating estimates by $3.33 million. Orchid Island Capital, Inc. (NYSE: ORC) has also gained 19.03% in the past 6 months and 26.20% year to date.
By the end of the first quarter of 2021, 8 hedge funds out of the 866 tracked by Insider Monkey held stakes in Orchid Island Capital, Inc. (NYSE: ORC) worth roughly $19.8 million. This is compared to 10 hedge funds in the previous quarter with a total stake value of approximately $14.7 million.
You can also take a peek at 10 Best High Yield Dividend Stocks To Buy and 15 Fastest Growing Dividend Stocks.
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Disclosure: None. 10 Best High-Yield Monthly Dividend Stocks To Buy is originally published on Insider Monkey.
