In this article, we discuss the best monthly dividend stocks to buy for 2022.
The importance of dividend-paying stocks cannot be emphasized more in times of financial volatility. During the pandemic in 2020, retirees and retail investors, especially, turned their attention to dividend-paying stocks to ensure regular income for themselves. In this regard, exchange-traded funds with high dividend stocks remained big winners as $25 billion were invested in the sector in the first half of 2021, as reported by Wall Street Journal.
According to a report published by Morgan Stanley, portfolios that focus on strong dividends can generate better returns, irrespective of the market cycle. Moreover, the dividend-paying companies boast strong balance sheets, providing better opportunities to investors. Citing the historical returns of dividend stocks, the report mentioned that non-dividend stocks delivered an annual average return of 4.18% during 1991-2015, underperforming dividend stocks, which returned 9.7% during the same period. Some of the dividend stocks that are famous among investors include The Coca-Cola Company (NYSE:KO), The Procter & Gamble Company (NYSE:PG), General Mills, Inc. (NYSE:GIS), and Johnson & Johnson (NYSE:JNJ).
Recently, CNBC reported that yearly dividend payouts have reached $522 billion in 2021 so far, 8.1% from the previous year. This complies with the fact that over 300 companies in the S&P 500 have increased their dividends this year. This comes at a point when companies experience strong cash flows due to the economic recovery, making them able to retrieve money from buybacks. When considering dividend stocks, investors often take up REITs, as the sector pays 90% of its income in the form of dividends.
In this article, we will mention the stocks that pay monthly dividends to shareholders.
Photo by Artem Beliaikin on Unsplash
Our Methodology:
The stocks mentioned below pay monthly dividends. We considered analysts’ ratings and basic business fundamentals while choosing the stocks. Also, the hedge fund sentiment for each stock was also measured by using Insider Monkey’s Q3 data of 867 hedge funds. The stocks are ranked from the lowest yield to the highest.
10 Best Monthly Dividend Stocks to Buy for 2022
10. STAG Industrial, Inc. (NYSE:STAG)
Number of Hedge Fund Holders: 17
Dividend Yield as of January 30: 3.50%
STAG Industrial, Inc. (NYSE:STAG) is a real estate investment trust that focuses on single-tenant industrial properties. The company pays a monthly dividend of $0.1208 per share, with a dividend yield of 3.50%. Moreover, STAG Industrial, Inc. (NYSE:STAG) has been increasing its dividend for the past nine years.
In Q3 2021, STAG Industrial, Inc. (NYSE:STAG) posted an FFO of $0.53, which beat the estimates by $0.02. The company also announced the acquisition of 24 new buildings, worth $427.2 million. Recently, RBC Capital lifted its price target on STAG Industrial, Inc. (NYSE:STAG) to $50, with an Overweight rating on the shares, as the company is well-positioned to generate solid organic growth in its long-term target. As of the close of January 30, the stock is up 34.8% in the past 12 months.
At the end of Q3 2021, 17 hedge funds tracked by Insider Monkey reported owning stakes in STAG Industrial, Inc. (NYSE:STAG), up from 15 in the previous quarter. The total value of these stakes is over $219.3 million.
Like popular dividend stocks, such as The Coca-Cola Company (NYSE:KO), The Procter & Gamble Company (NYSE:PG), General Mills, Inc. (NYSE:GIS), and Johnson & Johnson (NYSE:JNJ), STAG Industrial, Inc. (NYSE:STAG) is also gaining ground among income investors in 2021.
9. Realty Income Corporation (NYSE:O)
Number of Hedge Fund Holders: 22
Dividend Yield as of January 30: 4.26%
Realty Income Corporation (NYSE:O), a real estate investment trust, is one of the best monthly dividend stocks, as it holds a 4.3% compound annual dividend growth rate since 1994. Moreover, the company has increased its dividend 112 times in the past 26 years.
As of Q3, 22 hedge funds in Insider Monkey’s database reported owning stakes in Realty Income Corporation (NYSE:O), compared with 23 in the preceding quarter. The consolidated value of these stakes is over $275 million. Among these hedge funds, Millennium Management was the leading shareholder of the California-based company in Q3, holding a stake worth $60.5 million.
Realty Income Corporation (NYSE:O) delivered a remarkable annual average return of 15.1% since its inception in the stock market in 1994. As of the close of January 30, the stock’s 12-month returns came in at 19.28. In its Q3 revenue, Realty Income Corporation (NYSE:O) beat the market consensus by $35.4 million at $491.9 million. Mizuho, recently, appreciated the company’s solid growth and lifted its price target on the stock to $82, while maintaining a Buy rating on the shares.
8. SL Green Realty Corp. (NYSE:SLG)
Number of Hedge Fund Holders: 17
Dividend Yield as of January 30: 5.18%
SL Green Realty Corp. (NYSE:SLG) is an American real estate investment trust that mainly acquires office buildings in New York City. The company showed resilience during the pandemic, as it posted an FFO of $7.29 last year, and analysts expect only a 10% decline in its FFO in 2021. Moreover, a 2.5% increase in its dividend signals a solid business, making it one of the best monthly dividend stocks.
As per Insider Monkey’s Q3 data, 17 hedge funds tracked by Insider Monkey held stakes in SL Green Realty Corp. (NYSE:SLG), compared with 21 in the previous quarter. The total value of these stakes is over $170.2 million, up significantly from $144 million.
In Q3, SL Green Realty Corp. (NYSE:SLG) posted an FFO of $1.78, which beat estimates by $0.20. Recently, BMO Capital raised its price target on SL Green Realty Corp. (NYSE:SLG) to $85, with a Market Perform rating on the shares, acknowledging the company’s 14.7% growth in its net operating income. Arrowstreet Capital was the company’s largest shareholder in Q3, owning a $46.4 million worth of stake.
7. Main Street Capital Corporation (NYSE:MAIN)
Number of Hedge Fund Holders: 5
Dividend Yield as of January 30: 6.00%
An American principal investment management firm, Main Street Capital Corporation (NYSE:MAIN) posted a record level of dividend income in Q3 at $23 million, up significantly from $8.1 million during the same period last year. Moreover, on November 2, the company raised its monthly dividend by 2.4% at $0.215 per share, making it one of the best monthly dividend stocks.
As the company reported growth in dividend income, Raymond James believes that return on shares is also posed to grow in the coming quarters. Recently, the firm lifted its price target on Main Street Capital Corporation (NYSE:MAIN) to $47, while maintaining an Outperform rating on the shares. In Q3, the company reported a total investment income of $76.7 million, beating estimates by $8.82 million. Main Street Capital Corporation (NYSE:MAIN) delivered a 32..9% return to shareholders in the past 12 months, as of the close of January 30.
At the end of Q3 2021, 5 hedge funds in Insider Monkey’s database were bullish on Main Street Capital Corporation (NYSE:MAIN), down from 8 in the previous quarter. These stakes hold a value of $26.1 million.
6. Pembina Pipeline Corporation (NYSE:PBA)
Number of Hedge Fund Holders: 8
Dividend Yield as of January 30: 6.39%
Pembina Pipeline Corporation (NYSE:PBA) is a Canadian pipeline transport company. The company’s pipelines transport hydrocarbon liquids and natural gas products produced in Western Canada. The company has been increasing its dividend since 2010, which, according to analysts, will likely continue in 2022 as well, and would reach $2.60 per share annually. Currently, Pembina Pipeline Corporation (NYSE:PBA) pays a monthly dividend of C$0.21, with a dividend yield of 6.39%.
Acknowledging the company’s growth potential, recently, Morgan Stanley reinstated its coverage on Pembina Pipeline Corporation (NYSE:PBA) with a Neutral rating and a C$45 price target. In Q3, Pembina Pipeline Corporation (NYSE:PBA) earned C$2.15 billion in revenues, up 43.3% from the prior-year quarter.
As of Q3 2021, the number of hedge funds tracked by Insider Monkey having stakes in Pembina Pipeline Corporation (NYSE:PBA) fell to 8, from 15 in the previous quarter. The total value of these stakes stood at $62.6 million.
Pembina Pipeline Corporation (NYSE:PBA) is also favored by investors like prominent stocks, such as The Coca-Cola Company (NYSE:KO), The Procter & Gamble Company (NYSE:PG), General Mills, Inc. (NYSE:GIS), and Johnson & Johnson (NYSE:JNJ).
5. Gladstone Commercial Corporation (NASDAQ:GOOD)
Number of Hedge Fund Holders: 8
Dividend Yield as of January 30: 6.53%
Gladstone Commercial Corporation (NASDAQ:GOOD), an equity real estate investment trust, surged 29.2% in the past year, as of the close of January. The stock is particularly famous among income-oriented investors as it offers a dividend yield of 6.53% on an annual dividend of $1.50 per share. Also, Gladstone Commercial Corporation (NASDAQ:GOOD) has never decreased or missed its dividend since its inception in 2003, which makes it one of the best monthly dividend stocks.
In Q3 2021, Gladstone Commercial Corporation (NASDAQ:GOOD) gained the attention of hedge funds in Insider Monkey’s database. 8 hedge funds were bullish on the company in Q3, up from 6 in the preceding quarter. These stakes hold a consolidated value of $49.8 million.
This November, Colliers Securities lifted its price target on Gladstone Commercial Corporation (NASDAQ:GOOD) to $26, while maintaining a Buy rating on the shares. In Q3, the company posted an EPS of $0.39, in line with the analysts’ consensus.
4. EPR Properties (NYSE:EPR)
Number of Hedge Fund Holders: 19
Dividend Yield as of January 30: 6.96%
EPR Properties (NYSE:EPR) is a real estate investment trust that mainly invests in amusement parks and related entertainment properties. Though the number of hedge funds having stakes in the company reduced in Q3, the analysts remained bullish on the stock as its fundamentals begin to improve post-pandemic. Recently, RBC Capital raised its price target on EPR Properties (NYSE:EPR) to $52, with a Sector Perform rating on the shares.
On January 13, EPR Properties (NYSE:EPR) announced a monthly dividend of $0.25 per share, with a dividend yield of 6.96%. During the third quarter of 2021, the company collected $11.3 million of deferred rent. Moreover, an FFO of $0.86, which beat consensus by $0.03, provided power to the company to revise its guidance upwards. EPR Properties (NYSE:EPR) now expects the full-year FFO in the range of $2.95-$3.01.
Arrowstreet Capital held the largest stake in EPR Properties (NYSE:EPR) in Q3, worth $53 million. Overall, 19 hedge funds were bullish on the company in Q3, with stakes valued at over $220 million. In the previous quarter, 20 hedge funds held stakes in EPR Properties (NYSE:EPR), valued at over $231 million.
3. Horizon Technology Finance Corporation (NASDAQ:HRZN)
Number of Hedge Fund Holders: 1
Dividend Yield as of January 30: 8.30%
Horizon Technology Finance Corporation (NASDAQ:HRZN) is a specialty finance company that mainly invests in developmental-stage companies in the tech, healthcare, and IT sectors. The company remains one of the best monthly dividend stocks due to its attractive yield of 8.30% and a special dividend of $0.05 per share, which the company announced in November, in addition to its monthly dividend of $0.10 per share.
In Q3, Horizon Technology Finance Corporation (NASDAQ:HRZN) reported revenue of $16.67 million, which beat estimates by $3.11 million and presented a 35.5% year-over-year growth. The company’s 12-month returns came in at 11.06%, as of January 30’s close.
At the end of Q3, Two Sigma Investors was the only shareholder of Horizon Technology Finance Corporation (NASDAQ:HRZN), owning a $2.5 million worth of stake.
2. AGNC Investment Corp. (NASDAQ:AGNC)
Number of Hedge Fund Holders: 16
Dividend Yield as of January 30: 9.76%
AGNC Investment Corp. (NASDAQ:AGNC) is an internally managed real estate investment trust that acquires mortgage-backed securities. This October, Barclays set a $17 price target on the stock, with an Equal Weight rating on the shares, maintaining its stance on the stock’s fair valuation.
Currently, AGNC Investment Corp. (NASDAQ:AGNC) pays a monthly dividend of $0.12 per share. The stock’s current dividend yield stands at 9.76%. In Q3, AGNC Investment Corp. (NASDAQ:AGNC) topped consensus, beating FFO estimates by $0.10 at $0.75. The company reported a net interest income of $279 million, which presented a decline of 7.6% from the prior-year quarter.
As per Insider Monkey’s data for Q3, 16 hedge funds held stakes in AGNC Investment Corp. (NASDAQ:AGNC), down from 19 in the previous quarter. The total value of these stakes is over $81.4 million. Of these hedge funds, Canyon Capital Advisors was the company’s largest shareholder in Q3, holding over 3.3 million shares.
1. Dynex Capital, Inc. (NYSE:DX)
Number of Hedge Fund Holders: 7
Dividend Yield as of January 30: 9.88%
Dynex Capital, Inc. (NYSE:DX), a real estate investment trust, has been paying dividends for the past 13 years. Currently, the company offers a monthly dividend of $0.13 per share, with a dividend yield of 9.88%.
At the end of Q3 2021, 7 hedge funds in Insider Monkey’s database held roughly $13 million worth of stake in Dynex Capital, Inc. (NYSE:DX). In the previous quarter, 9 hedge funds held stakes in the company, valued at $26.8 million.
In its Q3 earnings, Dynex Capital, Inc. (NYSE:DX) reported an adjusted net income of $27.7 million, presenting a 65.8% growth from the prior-year quarter. The company also posted an FFO of $0.54, versus the estimates of $0.48. Over the last two years, Dynex Capital, Inc. (NYSE:DX) has beaten FFO estimates 75% of the time. As of Q3, Marshall Wace LLP was the company’s largest shareholder, owning shares worth $5.1 million.
You can also take a look at 10 Cheap Monthly Dividend Stocks to Buy Now and 10 Best Monthly Dividend Stocks with High Yields
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Disclosure. None. 10 Best Monthly Dividend Stocks to Buy for 2022 is originally published on Insider Monkey.
