In this article, we discuss 10 high-yield monthly dividend stocks for August.
Due to elevated inflation and risks of recession, global economic growth is expected to fall to 2.9% in 2022, from 5.7% in the last year, according to World Bank. Considering the current situation, investors are gravitating toward dividend stocks in an effort to protect their investments. The main reason for the popularity of dividend stocks in volatile markets is that these companies often have higher-quality earnings, which are subsequently offered to shareholders as dividends. Moreover, strong dividend yields can support companies during a market crash, generating passive income for investors, as Morgan Stanley reported.
The historical performance of dividend companies shows that these stocks have outperformed non-dividend stocks as they focus on growing their cash flows and repurchasing shares. According to a report by Factset, dividend stocks had an annual average return of 9.7% from 1993 to 2015, compared with an average return of 4.18% of non-dividend stocks during the same period. Additionally, the report mentions that focusing on yields is crucial to dividend investment, especially the respective company’s historic average yield and its basic fundamentals. Companies that have strong track records of dividend growth appeal to investors more because they give them a clear insight into their potential income from these stocks.
Dividend companies like Altria Group, Inc. (NYSE:MO), AT&T Inc. (NYSE:T), and Exxon Mobil Corporation (NYSE:XOM) have above-average yields and also possess strong dividend histories. In addition to these stocks, some companies that pay monthly dividends to shareholders also have high yields, which benefit investors. In view of this, we will discuss 10 high-yield monthly dividend stocks.
Photo by Karolina Grabowska: https://www.pexels.com/photo/hands-holding-us-dollar-bills-4968630/
Our Methodology:
The stocks mentioned below pay monthly dividends to shareholders and have yields over 9%, as of August 2. These stocks are ranked from the lowest yield to the highest.
10 High-Yield Monthly Dividend Stocks for August
10. Horizon Technology Finance Corporation (NASDAQ:HRZN)
Dividend Yield as of August 2: 9.17%
Horizon Technology Finance Corporation (NASDAQ:HRZN) is an American specialty finance company that provides structural debt products to life sciences and tech companies.
At the end of Q1 2022, Horizon Technology Finance Corporation (NASDAQ:HRZN) reported $14.5 million in cash and had a credit facility capacity of $187.8 million. The company’s total assets amounted to over $541.5 million at the end of the quarter, up from $514 million in the previous quarter. Though Horizon Technology Finance Corporation (NASDAQ:HRZN) hasn’t raised its monthly payouts since 2016 but the company has been making consistent dividend payments for the past 10 years. It currently pays a monthly dividend of $0.10 per share, with a yield of 9.17%, as of August 2.
As per Insider Monkey’s Q1 2022 database, 7 hedge funds owned stakes in Horizon Technology Finance Corporation (NASDAQ:HRZN), up from 6 in the previous quarter. The collective value of these stakes is over $6.8 million. Ken Griffin and Paul Tudor Jones were the company’s most prominent stakeholders at the end of March 2022.
In addition to famous dividend stocks like Altria Group, Inc. (NYSE:MO), AT&T Inc. (NYSE:T), and Exxon Mobil Corporation (NYSE:XOM), Horizon Technology Finance Corporation (NASDAQ:HRZN) can be a good addition to investors’ dividend portfolio because of its monthly payouts.
9. Prospect Capital Corporation (NASDAQ:PSEC)
Dividend Yield as of August 2: 9.34%
Prospect Capital Corporation (NASDAQ:PSEC) is a New York-based publicly-traded business development company. The company was part of 6 hedge fund portfolios in Q1 2022, according to Insider Monkey’s database. The collective value of stakes owned by these hedge funds stood at over $18.4 million.
Prospect Capital Corporation (NASDAQ:PSEC) reported solid financials in its Q1 2022 earnings report. The company had $36.4 million available in cash, with total assets of roughly $7.5 billion. The company also holds a strong dividend history, making dividend payments since its inception in 2004. The cumulative value of these dividend payments stands at $3.5 billion.
Prospect Capital Corporation (NASDAQ:PSEC) pays a monthly dividend of $0.06 per share and this July marked the company’s 59th consecutive monthly distribution to shareholders. As of August 2, the stock’s dividend yield came in at 9.34%.
8. Dynex Capital, Inc. (NYSE:DX)
Dividend Yield as of August 2: 9.43%
Dynex Capital, Inc. (NYSE:DX) is a Virginia-based financial services company that provides services in risk management and capital allocation. The company’s free cash flow generation has remained stable over the years, with an FCF of nearly $147 million in 2021. It reported cash of $325.6 million at the end of Q2 2022, with total assets standing at over $3.2 billion.
Dynex Capital, Inc. (NYSE:DX) had to slash its dividend in 2020 in recognition of the Covid-19 pandemic. However, the company maintained its payments throughout these months. It offers a monthly dividend of $0.13 per share, with a yield of 9.43%, recorded on August 2. The company’s dividend payout ratio stands at 36.7%.
In June, Keefe Bruyette raised its price target on Dynex Capital, Inc. (NYSE:DX) to $18.50 while upgrading the stock to Outperform. The firm presented a positive stance on mortgage-backed securities.
At the end of Q1 2022, 6 hedge funds were bullish on Dynex Capital, Inc. (NYSE:DX), compared with 4 a quarter earlier. The combined value of stakes owned by these hedge funds stood at nearly $19 million. With stakes worth over $11.6 million, Balyasny Asset Management was the company’s leading stakeholder in Q1.
7. Ellington Financial Inc. (NYSE:EFC)
Dividend Yield as of August 2: 11.23%
Ellington Financial Inc. (NYSE:EFC) is a real estate credit company that has expertise in diversified credit, mortgage, and related markets.
In Q1 2022, Ellington Financial Inc. (NYSE:EFC) reported cash and cash equivalents of $363.5 million and other assets of $632.5 million. The company generated nearly $33 million in free cash flow during the quarter and paid $11.6 million in dividends. This shows that the company has enough cash to support its shareholders’ obligations. Ellington Financial Inc. (NYSE:EFC) pays a monthly dividend of $0.15 per share, raising it twice in 2021. As of August, the stock’s dividend yield stood at 11.23%.
Appreciating the company’s core earnings and stable dividend, Piper Sandler set a $17 price target on Ellington Financial Inc. (NYSE:EFC) in July, with an Overweight rating on the shares.
According to Insider Monkey’s data, Ellington Financial Inc. (NYSE:EFC) was part of 7 hedge fund portfolios in Q1 2022, the same as in the previous quarter. The stakes owned by hedge funds hold a collective value of over $25.6 million.
6. Ellington Residential Mortgage REIT (NYSE:EARN)
Dividend Yield as of August 2: 11.28%
Ellington Residential Mortgage REIT (NYSE:EARN) acquires real estate-related assets and specializes in residential mortgages. In Q1 2022, the company reported cash and cash equivalents of nearly $30 million, with other assets amounting to over $11.3 million. The company generated $6.89 million in free cash flow during the quarter, up from $6.2 million in the previous quarter. Dividend payments represented $1.3 million of the free cash flow, signaling strong cash flow generation.
Ellington Residential Mortgage REIT (NYSE:EARN) currently pays a monthly dividend of $0.08 per share, with a dividend yield of 11.28%, as of August 2.
In June, Piper Sandler lowered its price target on Ellington Residential Mortgage REIT (NYSE:EARN) to $9 with an Overweight rating on the shares, in view of the firm slashing specialty finance price targets due to possible recession. However, analysts are positive about major dividend stocks, such as Altria Group, Inc. (NYSE:MO), AT&T Inc. (NYSE:T), and Exxon Mobil Corporation (NYSE:XOM).
The number of hedge funds tracked by Insider Monkey owning stakes in Ellington Residential Mortgage REIT (NYSE:EARN) fell to 4 in Q1 2022, from 8 in the previous quarter. These stakes hold a combined value of over $9.76 million. Renaissance Technologies was the company’s leading stakeholder in Q1.
5. Broadmark Realty Capital Inc. (NYSE:BRMK)
Dividend Yield as of August 2: 11.29%
Broadmark Realty Capital Inc. (NYSE:BRMK) is a Washington-based specialty real estate finance company that provides financial solutions to its consumers.
In Q1 2022, Broadmark Realty Capital Inc. (NYSE:BRMK) generated over $14.3 million in free cash flow, up from $13.6 million in the previous quarter. The company’s dividend payments amounted to nearly $9.3 million, which shows that the company’s dividends are well covered within its free cash flow. Broadmark Realty Capital Inc. (NYSE:BRMK) currently pays a monthly dividend of $0.07 per share, with a yield of 11.29%, as of August 2.
This June, Piper Sandler initiated its coverage of Broadmark Realty Capital Inc. (NYSE:BRMK) with a Neutral rating, highlighting the current market environment.
At the end of Q1 2022, 7 hedge funds in Insider Monkey’s database owned stakes in Broadmark Realty Capital Inc. (NYSE:BRMK), down from 11 a quarter earlier. The stakes owned by these hedge funds are valued at over $50 million. With over 4.8 million BRMK shares, Farallon Capital was the company’s leading stakeholder in Q1.
4. SLR Investment Corp. (NASDAQ:SLRC)
Dividend Yield as of August 2: 11.44%
An American business development company, SLR Investment Corp. (NASDAQ:SLRC) reported approximately $9.1 million in cash at the end of Q1 2022. The company generated $304.2 million in free cash flow during the quarter and has access to $765 million of available capital. SLR Investment Corp. (NASDAQ:SLRC) currently pays a monthly dividend of $0.1367 per share, with a dividend yield of 11.44%, as of August 2.
Highlighting the recent pullback in business development stocks, Keefe Bruyette set a $16.50 price target on SLR Investment Corp. (NASDAQ:SLRC) SLR Investment Corp. (NASDAQ:SLRC) in July, with a Market Perform rating on the shares.
The number of hedge funds tracked by Insider Monkey owning stakes in SLR Investment Corp. (NASDAQ:SLRC) stood at 6 in Q1 2022, the same as in the previous quarter. The total value of these stakes jumped to nearly $18 million in Q1, from $17.2 million in Q4 2021.
3. AGNC Investment Corp. (NASDAQ:AGNC)
Dividend Yield as of August 2: 11.59%
AGNC Investment Corp. (NASDAQ:AGNC) is a Maryland-based real estate investment trust that invests in agency mortgage-backed securities.
AGNC Investment Corp. (NASDAQ:AGNC) ended Q2 2022 with cash and cash equivalents of over $906 million with total assets worth $61.2 million. The company’s free cash flow stood at over $1.5 billion at the end of FY21, down from $1.7 billion in 2020. AGNC Investment Corp. (NASDAQ:AGNC) has been a dividend-payer since 2008, with its payouts holding a cumulative value of over $11.8 billion. Its monthly dividend stands at $0.12 per share, with a yield of 11.59%, as of August 2.
In June, Keefe Bruyette raised its price target on AGNC Investment Corp. (NASDAQ:AGNC) to $13.25 and upgraded the stock to Outperform.
As per Insider Monkey’s Q1 2022 database, 14 hedge funds held investments in AGNC Investment Corp. (NASDAQ:AGNC), with a total value of over $70.4 million. Canyon Capital Advisors held the largest stake in the company in Q1, worth over $40 million.
2. ARMOUR Residential REIT, Inc. (NYSE:ARR)
Dividend Yield as of August 2: 15.56%
A Florida-based real estate investment trust company, ARMOUR Residential REIT, Inc. (NYSE:ARR) reported strong financial health in Q1 2022. The company had nearly $317 million available in cash and had total assets worth over $8.7 billion. In addition to this, its cash and unencumbered securities exceeded $646.2 million during the quarter.
Though ARMOUR Residential REIT, Inc. (NYSE:ARR) has cut its dividend several times, the company maintained an 11-year track record of consistent dividend payments. It currently pays a monthly dividend of $0.10 per share and its dividend yield came in at 15.56%, as of August 2.
According to Insider Monkey’s data, 4 hedge funds owned roughly $6 million worth of stakes in ARMOUR Residential REIT, Inc. (NYSE:ARR) in Q1 2022. In the previous quarter, 6 hedge funds owned stakes in the company, valued at over $11.3 million.
1. Orchid Island Capital, Inc. (NYSE:ORC)
Dividend Yield as of August 2: 16.9%
Orchid Island Capital, Inc. (NYSE:ORC) is a Florida-based specialty finance company that invests in residential mortgage-backed securities on a leveraged basis.
At the end of Q1 2022, Orchid Island Capital, Inc. (NYSE:ORC) had cash of over $427.4 million, with total assets standing at $5 billion. The company generated $114 million in free cash flow, up from $35.2 million in the previous quarter. It paid roughly $8 million in dividends during the quarter. Orchid Island Capital, Inc. (NYSE:ORC) has been paying dividends steadily to shareholders since its IPO in 2013. It currently offers a monthly dividend of $0.045 per share, with a dividend yield of 16.9%, as recorded on August 2.
At the end of March 2022, 4 hedge funds tracked by Insider Monkey held investments in Orchid Island Capital, Inc. (NYSE:ORC), down from 5 a quarter earlier. The stakes owned by these hedge funds are collectively valued at over $1.2 million.
You can also take a look at 12 Best Bear Market Stocks to Buy Now and Top Stock Picks of Michael Burry.
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Disclosure. None. 10 High-Yield Monthly Dividend Stocks for August is originally published in Insider Monkey.
