In this article we will take a look at the 10 stocks that pay dividends monthly.
Investing in stocks that pay dividends monthly or regularly is an excellent strategy for investors who want consistent returns. Many dividend stocks have regular payouts every quarter, but this might not be an ideal situation for investors who have regular bills. If you are an investor who wants to have some extra cash flow every month, then stocks that pay dividends monthly should be on your radar. Finding companies that have monthly dividends payout is not exactly a walk in the park. Investors should consider company fundamentals and other important information about the company’s performance before investing in a dividend stock. Not all dividend stocks are healthy. Investors, therefore, need to put in some research to determine which stocks that best suit their needs.
Investors who want monthly dividends should consider dividend stocks that offer high yields consistently to facilitate healthy payouts. However, not all the stocks that pay out dividends are good. Some dividend payouts are unsustainable especially considering the area of investment. It highlights the importance of considering the various company and stock performance factors. Investors should look for stocks that offer a mix of healthy and reasonable dividends from investment areas that promise to deliver consistently over an extended duration of time.
Stone Harbor Emerging Markets Income Fund (NYSE: EDF) is one such company that pays monthly divided and has a dividend yield of 27%. Its stock has been trading in the range of $5.72 to $9.00 for last one year. Stone Harbor Emerging Markets Income Fund has posted a return of 41.98% over past one year.
Another fund worth talking about is Cohen & Steers MLP Income and Energy Opportunity Fund, Inc. (NYSE: MIE) whose dividend yield is 27.42%. The fund has given a return of 72.22% to its shareholders over past one year. Cohen & Steers MLP Income and Energy Opportunity Fund, Inc. is trading in the range of $5.72-9.00 over past one year.
International Business Machines Corporation (NYSE: IBM) is another notable tech dividend stocks that has a dividend yield of 4.59%. This is is 26th dividend of the company. IBM has been increasing its dividend over the past 25 years. International Business Machines Corporation (NYSE: IBM) has made it to Dividend Channel ”S.A.F.E. 25” list with its good divined track history. On April 27, IBM (NYSE:IBM) declared a quarterly dividend of $1.64 per share, which shows a 0.6% increase from prior dividend of $1.63. Forward yield comes in at 4.63%
Altria Group, Inc. (NYSE: MO) is another stock that has good history of paying dividends consistently with a dividend yield of 7.29% It has a quarterly payout of $0.86 and paid a dividend of $2.40 in 2020. Post its 2008 spin-off from Philip Morris International, Altria Group, Inc. (NYSE: MO) has raised dividend annually. Altria Group, Inc. (NYSE: MO) is an excellent dividend with decades of consistent dividend hikes. Recently, the company beat estimates for Q1 Non-GAAP EPS. Revenue in the quarter, however, slid 3.4% to $4.88 billion, missing the Street forecasts of $110 million. The company reiterated its 2021 guidance for EPS.
However, Altria Group, Inc. (NYSE: MO) and International Business Machines Corporation (NYSE: IBM) are not monthly dividend stocks.
Investing in dividend stocks has become extremely important in the current age of financial volatility, which isn’t sparing even the smart money. 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 26, 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 16. That’s why we believe hedge fund sentiment is a handy indicator that investors should consider. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
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Here are the top 10 dividend stocks that pay dividends monthly.
Stocks that Pay Dividends Monthly
10. Orchid Island Capital, Inc. (NYSE: ORC)
Number of Hedge Fund Holders: 10
Dividend Yield: 13.98%
Orchid Island Capital, Inc. (NYSE: ORC) is an investment fund that prefers mortgage-backed securities (RMBS), particularly structured Agency RMBS and passthrough Agency RMBS. The company announced a $0.065 per share dividend for April 2021. Orchid Island Capital, Inc. (NYSE: ORC) latest financials reveal that the fund suffered a $0.34 per share GAAP net loss for Q1 2021. It includes unrealized and realized RMBS losses amounting to $0.60 per share.
Orchid Island Capital announced recently that it plans a public offering to issue 8 million common shares. J.P. Morgan will serve as the bookrunner and underwriter with an option to purchase an extra 1.2 million shares.
As far as Q4 2020 financials are concerned, Orchid Capital’s net income was $16.5 million, or $0.23 per share. Its net interest income for the same quarterly period was $23.9 million, or $0.34 per share. Total expenses amounted to 2.8 million during the three months. Orchid Island Capital, Inc. (NYSE: ORC)’s dividend in Q4 2020 was $0.195 per share, while its full-year dividend was $0.79 per share. The company’s total dividends since its IPO amount to $11.785 per share, which means that it has so far been one of the best stocks that pay dividends monthly.
17 hedge funds in our database own this stock compared at the end of Q4 2020 compared to 25 in Q3 2020. Fund manager D E Shaw is one amongst them and owns 1.15 million shares of the fund.
9. RiverNorth/DoubleLine Strategic Opportunity Fund, Inc. (NYSE: OPP)
Number of Hedge Fund Holders: 1
Dividend Yield: 11.78%
RiverNorth/DoubleLine Strategic Opportunity Fund, Inc. (NYSE: OPP) is a closed-end multi-manager fund that prefers investing in closed end funds and fixed income securities. It boasts of a diversified portfolio that consists of fixed income securities from different asset classes. Its latest dividend declaration was $0.1586 per share. Together with sister fund RiverNorth Specialty Finance Corporation, the fund recently declared their Q2 2021 preferred dividends.
RiverNorth/DoubleLine Strategic Opportunity Fund, Inc. (NYSE: OPP) declared a $0.27344 dividend per share for its 4.375% Series A Cumulative Preferred shares. Meanwhile, RiverNorth Specialty Finance Corporation declared a $0.36719 per share dividend for its 5.875% Series A Term Preferred shares.
8. RiverNorth Opportunities Fund, Inc. (NYSE: RIV)
Number of Hedge Fund Holders: N/A
Dividend Yield: 11.66%
RiverNorth Opportunities Fund, Inc. (NYSE: RIV) is a closed-end, non-diversified management company that seeks to provide its investors with current income, as well as capital appreciation. Its market strategy is based on tactical asset allocation in exchange-traded funds and closed-end funds. The company recently declared a $0.17 per share dividend, which is in line with its previous dividend with a 12.5% distribution rate on its NAV per share. The healthy dividend makes it one of the best dividend stocks that pay dividends monthly. RiverNorth Opportunities Fund, Inc. (NYSE: RIV)’s current asset value is $16.19 per share, which was December 31, 2020.
7. Western Asset Mortgage Opportunity Fund Inc. (NYSE: DMO)
Number of Hedge Fund Holders: 1
Dividend Yield: 8.93%
Western Asset Mortgage Opportunity Fund Inc. (NYSE: DMO) is a closed-end, limited-term, and non-diversified investment company whose goal is to provide regular income for its investors. The company invests mainly to offer current income, but it also has a focus on capital appreciation.
Most of the fund’s investments are in mortgage-backed securities (MBS), which constitute its diversified portfolio, but it also has another robust portfolio in commercial mortgage-backed securities (CMBS). The company plans to use a public-private investment fund formed through the Legacy Securities Public-Private Investment Program (PPIP) to invest in MBS.
Western Asset Mortgage Opportunity Fund Inc. (NYSE: DMO) recently declared a dividend of $0.1125 per share, which is in line with its dividend payout for the previous month. It also announced its financial position earlier this year, revealing that it had $398 million in total assets at the end of January 2021 at a $18.78 NAV per share. This represents an improvement from the $371 million worth of total assets at the end of January 2020 and a NAV of $18.68 per share. Its share price and dividend yield highlight its potential as one of the best monthly dividend stocks.
Western Asset Mortgage Opportunity Fund Inc. (NYSE: DMO) reported a GAAP net income of $10.8 million, or $0.18 per share in Q4 2020. It also declared a dividend of $0.06 per share for the same quarterly period. The company reported a $328.3 million, or $5.72 per net loss for the full year 2020. Its core earnings for the year amounted to $32.6 million, or $0.57 per share. Its annualized net interest from its portfolio was 1.93%.
6. First Trust MLP and Energy Income Fund (NYSE: FEI)
Number of Hedge Fund Holders: 2
Dividend Yield: 8.12%
First Trust MLP and Energy Income Fund (NYSE: FEI) is a managed ETF whose portfolio is different from the First Trust Exchange-Traded Fund III ETF. It is a closed-end non-diversified fund that targets high returns from its investments, and it is committed to paying out regular dividends to shareholders. Roughly 85% of its managed assets are debt securities and equity, invested in the energy industry, including utilities and MLP-related entities. First Trust MLP and Energy Income Fund (NYSE: FEI)’s latest dividend payout was $0.05 per share, which aligns with the previous dividend, earning it a spot in the list of best monthly dividend stocks.
5. NexPoint Strategic Opportunities Fund (NYSE: NHF)
Number of Hedge Fund Holders: 5
Dividend Yield: 5.03%
NexPoint Strategic Opportunities Fund (NYSE: NHF) operates as a listed company seeking capital appreciation and current income for its investors. Its assets were worth $746 million, while its investment was just shy of $700 million as of December 31, 2012. The company announced a monthly dividend of $0.05 per share, which is in line with the previous monthly dividend payout.
Some of the company’s key developments so far this year include the announcement of the completion of its common shares tender offer in exchange for 80% newly-issued 5.50% Series A Preferred Shares and 20% cash. The initial results of the exchange offer reveal that NexPoint Strategic Opportunities Fund expects a common share repurchase of around 9 million shares priced at $12.00 per share, which means the repurchase cost $108 million.
4. Stone Harbor Emerging Markets Total Income Fund (NYSE: EDI)
Number of Hedge Fund Holders: N/A
Dividend Yield: 21.03%
Ranking 4th on the list of best stocks that pay dividends monthly is Stone Harbor Emerging Markets Total Income Fund (NYSE: EDI). It’s a closed-end ETF and exchange-traded fund under non-diversified designation. The company recently announced its common stock dividend distribution at $0.07 per share. The dividend distribution represents a 9.45% annualized distribution rate at the prevailing $8.89 share price and 11.98% annualized distribution rate at $7.01 per share net asset value. Stone Harbor Emerging Markets Total Income Fund paid out a monthly dividend of $0.08 per share on February 12, 2021. Its commitment to providing healthy and consistent dividends to its shareholders makes it one of the best stocks that pay out dividends monthly.
3. First Trust New Opportunities MLP & Energy Fund (NYSE: FPL)
Number of Hedge Fund Holders: 1
Dividend Yield: 8.21%
First Trust New Opportunities MLP & Energy Fund (NYSE: FPL) is a closed-end, non-diversified, and managed fund that aims to deliver high returns to investors. Its investments are mainly in energy utilities and the energy industry. It invests in electric utilities and midstream companies that are well-positioned to provide consistent growth well into the future.
First Trust New Opportunities MLP & Energy Fund announced a dividend of $0.0375 per share for April, aligning with the dividend payout for the previous month. Its investment in Midstream looks healthy considering the demand for fossil fuels while experiencing growth from its utilities investments courtesy of electrification. The fund is not largely diversified, considering that its assets are in a few companies. 2020 was a good year for the fund, although there are signs that it might be over distributing. First Trust is currently trading at discounted prices, but its yield remains impressive at 8.21%.
2. Stone Harbor Emerging Markets Income Fund (NYSE: EDF)
Number of Hedge Fund Holders: N/A
Dividend Yield: 10.34%
Stone Harbor Emerging Markets Income Fund (NYSE: EDF) is a publicly listed and closed-end exchange-traded fund that operates as an investment company. Its monthly payout is $0.07 per share, which was 12.5% lower than the previous $0.08 per share dividend payout.
Stone Harbor Emerging Markets Income Fund had a net asset value of $8.23 per share and a $9.14 share price as of April 20 this year, with a distribution rate of 9.19% for the share price and 10.21% for the net asset value. Investors should note that the fund has a lot of exposure in Argentina, a country with a long history of debt defaulting and financial mismanagement. On the other hand, Stone Harbor Emerging Markets Income Fund maintains an attractive yield at 10.87%, but it is not clear if the fund can sustain it. Its valuation seems extremely high considering the risk. It is one of the best stocks that pay dividends monthly, assuming that the red flags are worth the risk.
1. Cohen & Steers MLP Income and Energy Opportunity Fund, Inc. (NYSE: MIE)
Number of Hedge Fund Holders: N/A
Dividend Yield: 26.63%
Cohen & Steers MLP Income and Energy Opportunity Fund, Inc. (NYSE: MIE) is an investment company that manages alternative income and assets that aim to provide alpha, diversification, and income. The company operates as a closed-end exchange-traded fund that is non-diversified. The fund primarily invests in opportunities worldwide that require local insights and knowledge
Cohen & Steers MLP Income and Energy Opportunity Fund, Inc. board of directors announced dividend payouts at $0.015 per share, payable on April 30, and $0.015 per share, payable on May 28. Earlier this year, the board announced its first monthly distribution at $0.130 per share paid out in January, February, and March. So far, it has demonstrated its commitment as one of the stocks that pay dividends monthly. The fund has been operating under New York Stock Exchange listing since October last year. The company proposed the liquidation of its MLP/midstream fund in February 2020 due to underperformance.
You can also take a peek at 10 Best Dividend Stocks Under $20 and Top 10 Dividend Stocks That Pay Monthly.
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Disclosure: None. 10 Stocks that Pay Dividends Monthly is originally published on Insider Monkey.
