In this article, we discuss 10 best monthly dividend stocks to buy in October. You can skip our detailed analysis of dividend stocks and their returns in the past, and go directly to read 5 Best Monthly Dividend Stocks to Buy in October.
Investors often advocate income-generating stocks during periods of high inflation and slow economic growth. These stocks have historically delivered positive returns to shareholders, making investors turn away from growth companies. According to a report by Financial Synergies Wealth Advisors, high dividend payers delivered an annual average return of 11.8% from 1928 to 2021, whereas low payers returned 11% during the same period.
Jeffrey Kleintop, the chief global investment strategist at Charles Schwab, talked about the importance of dividend stocks in the current economic environment in his interview with Ameritrade Network this September. He said that in every recessionary bear market in the last 50 years, high dividend stocks have outperformed the broader market. He further asserted that in every scenario, dividend stocks have materially less downside and they are also up this year relative to the overall market. Another report by Guardian Capital also expounded on the significance of dividend stocks. The report mentioned that over the last 50 years, companies with growing free cash flow and strong dividend policies have shown long-term performances with less volatility, compared with non-dividend stocks.
Dividend companies like Exxon Mobil Corporation (NYSE:XOM), Chevron Corporation (NYSE:CVX), and AbbVie Inc. (NYSE:ABBV) are favored by investors as they hold decades-long dividend growth track records. Moreover, these companies have delivered positive returns this year so far, whereas the S&P 500 declined by 20.9%, as of the close of October 4. In this article, we will discuss the best monthly dividend stocks to buy in October.
Photo by Dan Dennis on Unsplash
Our Methodology:
We selected stocks that pay monthly dividends to shareholders. We examined these stocks through their financial health, balance sheets, and dividend policies. The stocks are ranked from the lowest dividend yield to the highest.
10 Best Monthly Dividend Stocks to Buy in October
10. Savaria Corporation (TSX:SIS.TO)
Dividend Yield as of October 5: 3.63%
Savaria Corporation (TSX:SIS.TO) is a Canada-based company that provides accessibility solutions, such as platform lifts, stairlifts, and residential and commercial elevators for the physically challenged.
Savaria Corporation (TSX:SIS.TO) reported strong Q2 results. It posted an operating income of $17.7 million, up 99% from the same period last year. The company’s operating income represented 9.2% of its revenue. Its operating cash flow came in at $14.6 million, compared with $13 million in the previous quarter. Moreover, its free cash flow jumped to $9.7 million, from $9.4 million a quarter earlier.
On September 16, Savaria Corporation (TSX:SIS.TO) declared a 3.8% hike in its monthly dividend to C$0.0433 per share. This was the company’s sixth consecutive year of dividend growth, coming through as one of the best monthly dividend stocks. In addition to this, the company has raised its dividends at a CAGR of 12.08% in the last five years. As of October 5, the stock’s dividend yield came in at 3.63%.
In addition to famous dividend stocks like Exxon Mobil Corporation (NYSE:XOM), Chevron Corporation (NYSE:CVX), and AbbVie Inc. (NYSE:ABBV), Savaria Corporation (TSX:SIS.TO) can be a good addition to dividend portfolios due to its monthly payouts.
9. Realty Income Corporation (NYSE:O)
Dividend Yield as of October 5: 4.94%
Realty Income Corporation (NYSE:O) is one of the best monthly dividend stocks on our list with a 28-year dividend growth track record. The real estate investment trust has paid 627 consecutive monthly dividends on its common stock throughout its 53-year operating history. It currently pays a monthly dividend of $0.248 per share, with a dividend yield of 4.94%, as of October 5.
In Q2 2022, Realty Income Corporation (NYSE:O) generated $743 million in free cash flow (FCF), up from $513.4 million in the previous quarter. The company’s FCF was stable enough to support its dividend payments of $445.8 million during the quarter. These dividend payments represented 76.5% of the company’s AFFO. Moreover, its revenue for the quarter came in at $810.4 million, up 75% from the same period last year.
In October, Raymond James maintained its Outperform rating on Realty Income Corporation (NYSE:O) with a $68 price target, as the firm sees the company as a strong risk/reward play within the net lease amid the uncertain market situation.
At the end of Q2 2022, 19 hedge funds tracked by Insider Monkey owned stakes in Realty Income Corporation (NYSE:O), down from 22 in the previous quarter. These stakes are collectively valued at over $200.7 million. Citadel Investment Group was the company’s leading stakeholder in Q2.
8. STAG Industrial, Inc. (NYSE:STAG)
Dividend Yield as of October 5: 4.97%
STAG Industrial, Inc. (NYSE:STAG) is an American real estate investment trust company that invests in industrial properties across the country. In September, Evercore ISI overtook the coverage of the stock with an Outperform rating and a $39 price target. The firm highlighted the company’s interest rates forecasts amid macro changes.
In the second quarter of 2022, STAG Industrial, Inc. (NYSE:STAG) generated $87.2 million in cash available for distribution, which showed a 16.6% growth from the same period last year. The company’s operating cash flow for the quarter came in at $102.3 million, compared with $88.8 million in the previous quarter. Its free cash flow grew to $77.6 million, from $69.2 million in the preceding quarter. This shows that the company’s cash position is strong to cover its monthly dividends.
STAG Industrial, Inc. (NYSE:STAG) has been raising its dividends consistently for the past 10 years, which makes it one of the best monthly dividend stocks on our list. It currently pays a dividend of $0.1217 per share every month, with a dividend yield of 4.97%, as recorded on October 5.
The number of hedge funds tracked by Insider Monkey owning stakes in STAG Industrial, Inc. (NYSE:STAG) grew to 27 in Q2 2022, from 21 in the previous quarter. These stakes have a total value of nearly $380 million.
Carillon Tower Advisers mentioned STAG Industrial, Inc. (NYSE:STAG) in its Q1 2022 investor letter. Here is what the firm has to say:
“U.S. and around the world, and the higher inflation this cycle than in 2000. Labor inflation and general labor availability were again concerns for many companies. Supply chains eased for some goods, but remained challenged for many commodities including energy, agriculture, and fertilizer due to war and general scarcity, and also in many consumer products as semiconductors remained in short supply. Stag Industrial (NYSE:STAG), a warehouse REIT focused on rural distribution properties, fell as interest rates rose and fear of an economic slowdown gripped markets.”
7. Pembina Pipeline Corporation (NYSE:PBA)
Dividend Yield as of October 5: 5.87%
Pembina Pipeline Corporation (NYSE:PBA) is a Canada-based pipeline transport company that also operates storage infrastructure and also delivers oil and natural gas to various parts of the country. On September 8, the company announced a 3.6% raise in its monthly dividend to C$0.2175 per share. This marked the company’s sixth consecutive year of dividend growth. As of October 5, the stock’s dividend yield came in at 5.87%.
In Q2 2022, Pembina Pipeline Corporation (NYSE:PBA) reported $604 million in operating cash flow and its free cash flow came in at $452 million. In the six months ending June, the company generated $1.3 billion in operating cash flow, which was majorly used to fund its dividends and the capital program. Its revenue for the quarter stood at $1.02 billion, up 14.1% from the same period last year.
In September, Industrial Alliance upgraded Pembina Pipeline Corporation (NYSE:PBA) to Buy with a C$49 price target.
At the end of Q2 2022, 14 hedge funds tracked by Insider Monkey owned stakes in Pembina Pipeline Corporation (NYSE:PBA), compared with 19 in the previous quarter. These stakes hold a collective value of over $91.7 million. Israel Englander and Jim Simons were the company’s major stakeholders in Q2.
ClearBridge Investments mentioned Pembina Pipeline Corporation (NYSE:PBA) in its Q1 2022 investor letter. Here is what the firm has to say:
“On a regional basis, the U.S. and Canada were the top contributors to quarterly performance. Pembina Pipeline, which provides transportation and midstream services for the energy industry in North America, was also up on greater LNG demand. The hiring of Scott Burrows as permanent CEO and Jaret Sprott as COO and reaffirmation of its corporate strategy also boosted investor sentiment. On an individual stock basis, the largest contributors to absolute returns in the quarter includes Pembina Pipeline.”
6. LTC Properties, Inc. (NYSE:LTC)
Dividend Yield as of October 5: 6.00%
LTC Properties, Inc. (NYSE:LTC) is a California-based real estate investment trust company that invests in senior housing and healthcare facilities through mortgage and joint ventures. In August, RBC Capital mentioned that the company’s management has been active in pursuing new transactions and raising capital to better position the balance sheet. In view of this, the firm raised its price target on the stock to $44 with a Sector Perform rating on the shares.
In Q2 2022, LTC Properties, Inc. (NYSE:LTC) reported revenue of $43 million, which showed a 13% growth from the same period last year. The company’s operating cash flow for the quarter came in at approximately $30 million, compared with $21 million in the prior-year period. In addition to this, the company also reported a rental income of $31.6 million, up from $29.8 million in Q2 2021.
Though LTC Properties, Inc. (NYSE:LTC) hasn’t raised its dividends since 2016, the company has maintained its payouts over these years. It pays a monthly dividend of $0.19 per share for a dividend yield of 6.00%, as of October 5. The company’s regular payouts make it one of the best monthly dividend stocks on our list.
At the end of Q2 2022, 6 hedge funds tracked by Insider Monkey reported owning stakes in LTC Properties, Inc. (NYSE:LTC), with a total value of over $16.4 million. Among these hedge funds, Citadel Investment Group owned the largest position in the company.
LTC Properties, Inc. (NYSE:LTC) is also grabbing investors’ attention alongside famous dividend stocks like Exxon Mobil Corporation (NYSE:XOM), Chevron Corporation (NYSE:CVX), and AbbVie Inc. (NYSE:ABBV).
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Disclosure. None. 10 Best Monthly Dividend Stocks to Buy in October is originally published on Insider Monkey.