13 Best Monthly Dividend Stocks to Buy According to Analysts

Published on March 20, 2023 at 2:42 pm by Vardah Gill in Dividend Stocks, Hedge Funds, News

In this article, we discuss 13 best monthly dividend stocks to buy according to analysts. You can skip our detailed analysis of dividend stocks and their performance, and go directly to read 5 Best Monthly Dividend Stocks to Buy According to Analysts.

In 2022, dividends remained a bright spot for investors, despite a stock market plunge. Global dividends grew to a record level last year due to investors’ inclination toward income-generating stocks. According to a report by Barron’s, global dividends increased by 8.4% to $1.56 trillion in 2022, massively driven by energy companies and larger banks. The report further mentioned that overall 12 countries achieved dividend records in dollars.

Last year’s returns also comply with the fact that dividend stocks remained on strong footing relative to the broad market. The S&P 500 ended 2022 down more than 18%, compared with a 6.21% decline in the S&P 500 Dividend Aristocrats Index. Moreover, Russell 2000 Dividend Growth Index plunged by 5.44% as compared with a negative 20.44% return of the Russell 2000 Index.

As investors face new economic challenges, analysts expect overall dividend growth to slow down this year. According to Janus Henderson, global year-over-year dividend growth is likely to slow to 2.3% in dollar terms. However, slow dividend growth doesn’t signal wider dividend cuts across US companies. Max Wasserman, founder and senior portfolio manager at Miramar Capital, spoke to Wall Street Journal about this year’s dividend growth outlook. He said:

“The increases may not be sky high. If a company has been raising the dividend by 5%, you might see them do 3% this year. But we expect to see increases if that’s the path they have been on.”

Wasserman further asserted that dividend cuts are a result of poor strategies related to capital allocation. Companies with high payout ratios often become victims of dividend cuts. For this reason, analysts recommend investing in companies with strong balance sheets and solid business models. Daniel Sotiroff, a senior analyst at Morningstar Research Services, highlighted the importance of dividend-focused funds to find protection in the current market environment. He spoke to the same media channel about possible dividend investment strategies and said:

“When you are focused on companies that are growing the dividend, that tends to mean that these are highly profitable companies. Investing in them can be a defensive investment in times of uncertainty.”

This statement establishes that dividend growers is a good investment option during inflationary periods. Previous analysis of dividend growers also shows that these securities have performed well in comparison to their peers. According to a report by Merrill Edge, Dividend Aristocrats— the companies that have raised their dividend for over 25 years— delivered an annual average return of 12.13% from 1990 through 2018, compared with a 9.96% return from the broader market during the same time. To know more about dividend growers and their performance, readers can have a look at 12 High-Growth Forever Dividend Stocks to Buy.

Some popular dividend stocks that are on investors’ radar include West Pharmaceutical Services, Inc. (NYSE:WST), The Procter & Gamble Company (NYSE:PG), and Exxon Mobil Corporation (NYSE:XOM). But in this article our focus would be monthly dividend stocks.

Image by Sergei Tokmakov Terms.Law from Pixabay

Our Methodology:

For this article, we first screened for monthly dividend stocks with yields above 3%, as of March 20. After that, we found the average price targets and ratings of these stocks placed by Wall Street analysts and other investment firms and narrowed down to the stocks with Buy ratings and strong upside potential based on their current share price and their average price targets. The stocks are ranked in ascending order of the upside potential as of March 20.

13. Shaw Communications Inc. (NYSE:SJR)

Upside Potential as of March 20: 2.72%

Average Price Target Based on Analyst Ratings: C$40.34

Shaw Communications Inc. (NYSE:SJR) is a Canadian telecommunications company that provides telephone, internet, and other mobile services to its consumers. The company currently pays a monthly dividend of $0.0985 per share and has a dividend yield of 3.04%, as of March 20. It is among the best monthly dividend stocks on our list.

SJR can be added to dividend portfolios alongside famous dividend stocks like West Pharmaceutical Services, Inc. (NYSE:WST), The Procter & Gamble Company (NYSE:PG), and Exxon Mobil Corporation (NYSE:XOM).

In fiscal Q1 2023, Shaw Communications Inc. (NYSE:SJR) reported revenue of C$1.37 billion, which beat estimates by C$340 million. During the quarter, the company paid nearly $148 million in dividends to shareholders.

As of the close of Q4 2022, 34 hedge funds tracked by Insider Monkey reported having stakes in Shaw Communications Inc. (NYSE:SJR), the same as in the previous quarter. These stakes have a total value of over $1.5 billion. With over 8 million shares, Pentwater Capital Management was the company’s leading stakeholder in Q4.

12. Main Street Capital Corporation (NYSE:MAIN)

Upside Potential as of March 20: 12.27%

Average Price Target Based on Analyst Ratings: $43.20

Main Street Capital Corporation (NYSE:MAIN) is a Texas-based specialty investment company that provides customized debt and equity financing to lower-middle market companies. Following the company’s recent quarterly earnings, B. Riley raised its price target on the stock in February to $45 and maintained a Buy rating on the shares. The firm also appreciated the company for its base dividend increases.

In the fourth quarter of 2022, Main Street Capital Corporation (NYSE:MAIN) reported a total investment income of $113.8 million, which showed a 38.6% growth from the same period last year. The company had roughly $50 million available in cash and cash equivalents at the end of December 2022.

Main Street Capital Corporation (NYSE:MAIN), one of the best monthly dividend stocks on our list, has been paying supplemental dividends for consecutive six quarters. It currently offers a monthly dividend of $0.225 per share and has a dividend yield of 7.02%, as of March 20.

The number of hedge funds tracked by Insider Monkey owning stakes in Main Street Capital Corporation (NYSE:MAIN) grew to 11 in Q4 2022, from 8 in the previous quarter. The collective value of these stakes is over $30 million.

11. Agree Realty Corporation (NYSE:ADC)

Upside Potential as of March 20: 12.54%

Average Price Target Based on Analyst Ratings: $76.93

Agree Realty Corporation (NYSE:ADC) is an American real estate investment trust company that focuses on the development and acquisition of net lease retail properties. In the fourth quarter of 2022, the company posted revenue of $116.5 million, up 27.5% from the same period last year. At the end of December 2022, it had total liquidity of approximately $1.5 billion and roughly $29 million of cash on hand.

On March 13, Agree Realty Corporation (NYSE:ADC) declared a monthly dividend of $0.24 per share, which fell in line with its previous dividend. The company is one of the best monthly dividend stocks on our list as it has raised its payouts for 11 years consistently. The stock has a dividend yield of 4.21%, as of March 20.

In February, Stifel raised its price target on Agree Realty Corporation (NYSE:ADC) to $77.50 and maintained a Buy rating on the shares.

At the end of December 2022, 21 hedge funds in Insider Monkey’s database owned stakes in Agree Realty Corporation (NYSE:ADC), compared with 26 in the previous quarter. These stakes have a consolidated value of over $371 million.

10. Realty Income Corporation (NYSE:O)

Upside Potential as of March 20: 14.09%

Average Price Target Based on Analyst Ratings: $70.03

An American real estate investment trust company, Realty Income Corporation (NYSE:O) is next on our list of the best monthly dividend stocks. On March 14, the company declared a 0.2% hike in its monthly dividend to $0.2550 per share. This marked the company’s 29th consecutive year of dividend growth. Its dividend yield on March 20 came in at 4.99%.

In March, Mizuho maintained a Neutral rating on Realty Income Corporation (NYSE:O) with a $66 price target, highlighting the company’s performance in the current environment.

As per Insider Monkey’s Q4 2022 database, 24 hedge funds owned stakes in Realty Income Corporation (NYSE:O), compared with 28 in the previous quarter. These stakes are collectively valued at roughly $327 million. Among these hedge funds, Zimmer Partners owned the largest stake in the company worth over $111 million.

9. LTC Properties, Inc. (NYSE:LTC)

Upside Potential as of March 20: 15.96%

Average Price Target Based on Analyst Ratings: $38.50

LTC Properties, Inc. (NYSE:LTC) is a California-based real estate investment trust company that invests in healthcare and senior housing facilities. The company recently sold its two nursing centers in New Mexico for over $21 million. Through the proceeds from the sales, it plans to pay down an unsecured revolving line of credit.

LTC Properties, Inc. (NYSE:LTC) currently pays a monthly dividend of $0.19 per share and has a dividend yield of 6.87%, as of March 20.

LTC Properties, Inc. (NYSE:LTC) was a part of 9 hedge fund portfolios, up from 5 in the previous quarter, as per Insider Monkey’s Q4 2022 database. The stakes owned by these hedge funds have a total value of over $8.8 million. Ken Griffin, Cliff Asness, and David Harding were some of the company’s major stakeholders in Q4.

8. STAG Industrial, Inc. (NYSE:STAG)

Upside Potential as of March 20: 19.62%

Average Price Target Based on Analyst Ratings: $38.17

STAG Industrial, Inc. (NYSE:STAG) is a Boston-based real estate investment trust company that acquires and operates industrial properties throughout the US. BMO Capital initiated its coverage on the stock in February with an Outperform rating and a $41 price target. The firm mentioned that the company is well-positioned to benefit from strong industrial fundamentals.

In Q4 2022, STAG Industrial, Inc. (NYSE:STAG) reported revenue of $170.3 million, which saw a 15.5% growth from the same period last year. The company’s cash available for distribution came in at $86.1 million, up 16% from the prior-year quarter.

One of the best monthly dividend stocks, STAG Industrial, Inc. (NYSE:STAG) declared a 0.7% hike in its monthly dividend on January 11 to $0.1225 per share. Through this increase, the company took its dividend growth streak to 11 years. The stock’s dividend yield on March 20 came in at 4.61%.

As of the close of Q4 2022, 15 hedge funds tracked by Insider Monkey owned stakes in STAG Industrial, Inc. (NYSE:STAG), worth over $175.5 million collectively.

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. AGNC Investment Corp. (NASDAQ:AGNC)

Upside Potential as of March 20: 20.23%

Average Price Target Based on Analyst Ratings: $11.71

AGNC Investment Corp. (NASDAQ:AGNC) is another best monthly dividend stock on our list. The real estate investment trust company has paid approximately $12 billion in dividends since its IPO in 2008 through the fourth quarter of 2022. It currently pays a monthly dividend of $0.12 per share and has a dividend yield of 14.78%, as of March 20.

In March, JPMorgan upgraded AGNC Investment Corp. (NASDAQ:AGNC) to Overweight with a $12.50 price target, presenting a positive stance on the company’s performance this year.

According to Insider Monkey’s database for Q4 2022, 22 hedge funds reported having stakes in AGNC Investment Corp. (NASDAQ:AGNC), with a total value of roughly $252.8 million. With over 5 million shares, Marshall Wace LLP was the company’s leading stakeholder in Q4.

6. EPR Properties (NYSE:EPR)

Upside Potential as of March 20: 27.42%

Average Price Target Based on Analyst Ratings: $45.50

EPR Properties (NYSE:EPR) is an American real estate investment trust company, based in Missouri. On March 15, the company declared a monthly dividend of $0.275 per share, consistent with its previous dividend. The stock has a dividend yield of 9.24%, as of March 20.

Along with popular dividend stocks like West Pharmaceutical Services, Inc. (NYSE:WST), The Procter & Gamble Company (NYSE:PG), and Exxon Mobil Corporation (NYSE:XOM), EPR is also favored by investors due to its monthly payouts.

Raymond James added EPR Properties (NYSE:EPR) to its ‘Analyst Current Favorite’ list in January and maintained a Strong Buy rating on the stock with a $45 price target.

At the end of Q4 2022, 23 hedge funds tracked by Insider Monkey reported owning stakes in EPR Properties (NYSE:EPR), compared with 25 in the previous quarter. The collective value of these stakes is over $208.8 million.

Click to continue reading and see 5 Best Monthly Dividend Stocks to Buy According to Analysts.

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Published on May 1, 2024 at by Inan Dogan, PhD

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