In this article, we discuss 10 high yield monthly dividend stocks.
The global COVID-19 pandemic weighed heavily on dividend investing in 2020, but the economy started to improve in 2021, post national lockdowns to control the virus from spreading and the massive vaccine rollout worldwide. In the second quarter of 2021, dividend payments amounted to $471.7 billion, gaining 26% as compared to the prior-year quarter, and just 6.8% lower than 2019 dividend payouts. Overall, the 2021 dividends were projected to clock in at roughly $1.4 trillion.
According to the Global Dividend Index, dividend payments declined 12.2% in 2020 to $1.26 trillion. However, due to the economic recovery in 2021 and projected economic conditions for 2022, many companies are expected to reinstate their previous dividend payouts, and the stocks which are yielding on the lower end of the spectrum can potentially increase their yields in the coming years.
Dividend investing has always been a popular strategy among seasoned and amateur investors alike, and it will continue to remain a solid source of income for traders who have a longer investment horizon. Utilities, banks, real estate, and casualty insurance sectors are set to take advantage of the soaring residential property market, as rising home prices will reflect in better margins and earnings, and consequently result in improved dividend payouts.
The most notable dividend stocks include Exxon Mobil Corporation (NYSE:XOM), International Business Machines Corporation (NYSE:IBM), and AbbVie Inc. (NYSE:ABBV).
Photo by Dan Dennis on Unsplash
Our Methodology
We selected high yielding stocks that pay monthly dividends, selecting companies with over 5% yield. The securities that were chosen had solid fundamentals, strong earnings, and mostly positive analyst ratings.
We also mentioned the hedge fund sentiment around each stock, which was gauged from 867 funds whose movement was tracked by Insider Monkey in the third quarter of 2021. We ranked the stocks according to the dividend yield.
High Yield Monthly Dividend Stocks
10. Main Street Capital Corporation (NYSE:MAIN)
Dividend Yield as of January 14: 5.85%
Number of Hedge Fund Holders: 5
Main Street Capital Corporation (NYSE:MAIN) is an investment management firm providing long-term debt and equity capital to lower middle market companies, and debt capital to middle market companies. Main Street Capital Corporation finances management buyouts, recapitalizations, and acquisitions of companies.
Main Street Capital Corporation announced a monthly per share dividend of $0.215, which reflects a 2.4% increase from the prior dividend of $0.210 paid for the third quarter of 2021 and the fourth quarter of 2020. The $0.215 dividend will be paid on January 14, February 15, and March 15, respectively. The company’s board also declared a special cash dividend of $0.10 per share in December 2021.
Raymond James analyst Robert Dodd on November 8 raised the price target on Main Street Capital Corporation to $47 from $44 and kept an Outperform rating on the shares.
Among the hedge funds tracked by Insider Monkey in the third quarter of 2021, 5 funds were bullish on Main Street Capital Corporation, with stakes amounting to $26.1 million, as compared to 8 funds holding stakes worth $18.7 million in Main Street Capital Corporation in the preceding quarter.
Robert B. Gillam’s McKinley Capital Management is the largest Main Street Capital Corporation stakeholder as of Q3 2021, holding 199,245 shares worth $8.18 million.
In addition to companies like Exxon Mobil Corporation, International Business Machines Corporation, and AbbVie Inc. offering quarterly dividend payouts, Main Street Capital Corporation is a notable stock that provides monthly dividends.
9. LTC Properties, Inc. (NYSE:LTC)
Dividend Yield as of January 14: 6.21%
Number of Hedge Fund Holders: 9
LTC Properties, Inc. (NYSE:LTC) is a California-based real estate investment trust that focuses its investments primarily on senior housing and the healthcare establishments. LTC Properties, Inc. invests via sale-leasebacks, mortgage financing, joint-ventures, and structured finance solutions. LTC Properties, Inc. disclosed that it has originated $46 million in new investments since the beginning of the third quarter of 2021.
On January 3, LTC Properties, Inc. announced a $0.19 per share monthly dividend, in line with previous. The dividend will be paid on January 31, February 28, and March 31. As of January 14, LTC Properties, Inc. offers a 6.21% dividend yield.
In its third quarter earnings report, announced on October 28, LTC Properties, Inc. posted a GAAP EPS of $0.28, missing estimates by $0.12. The $37.47 million revenue also missed estimates by $406,000.
KeyBanc analyst Jordan Sadler upgraded LTC Properties, Inc. to Overweight from Sector Weight with a $40 price target on January 13. The analyst stated that LTC Properties, Inc.’s “impending” cash flow recovery now appears poised to take hold across its portfolio.
A total of 9 hedge funds were bullish on LTC Properties, Inc. in the third quarter, with stakes amounting to $12.1 million, as compared to 10 funds holding stakes worth $8.9 million in LTC Properties, Inc. in the prior quarter.
Billionaire Israel Englander’s Millennium Management, the largest LTC Properties, Inc. stakeholder, acquired a position in the company in the third quarter of 2021, buying 129,066 shares worth $4.09 million.
8. Pembina Pipeline Corporation (NYSE:PBA)
Dividend Yield as of January 14: 6.23%
Number of Hedge Fund Holders: 8
Pembina Pipeline Corporation (NYSE:PBA) is a Canadian company offering pipeline transport and storage infrastructure for oil, petroleum, and natural gas across Western Canada.
Pembina Pipeline Corporation provided 2022 financial guidance and a year-end business update on December 8. The company management sees 2022 adjusted EBITDA of $3.35 billion to $3.55 billion and a 2022 capital investment program of $655 million. Cash flow from operating activities is expected to surpass dividends and the capital investment program in 2022.
On January 6, Pembina Pipeline Corporation announced a C$0.21 per share monthly dividend, in line with previous, providing a 6.23% yield as of January 14. The dividend will be paid on February 15 to shareholders of record on January 25.
Pembina Pipeline Corporation announced its Q3 financial results on November 4, posting earnings per share of $0.53, beating estimates by $0.01. Revenue over the period jumped 43.45% from the prior-year quarter to $1.72 billion, surpassing estimates by $218.91 million.
Like Exxon Mobil Corporation, International Business Machines Corporation, and AbbVie Inc., Pembina Pipeline Corporation is also a good option for income investors.
TD Securities analyst Linda Ezergailis on December 10 lowered the price target on Pembina Pipeline Corporation to C$44 from C$45 and kept a Buy rating on the shares.
In the third quarter of 2021, 8 hedge funds reported owning stakes in Pembina Pipeline Corporation, valued at $62.6 million, as compared to 15 funds in the prior quarter holding stakes worth $116.3 million in Pembina Pipeline Corporation.
John Overdeck and David Siegel’s Two Sigma Advisors is one of the leading Pembina Pipeline Corporation stakeholders from Q3 2021, with 336,083 shares worth $10.65 million.
7. Gladstone Capital Corporation (NASDAQ:GLAD)
Dividend Yield as of January 14: 6.91%
Number of Hedge Fund Holders: 4
Headquartered in Virginia, Gladstone Capital Corporation (NASDAQ:GLAD) is a business development company that focuses primarily on lending to lower middle market businesses, managing $3.4 billion in assets. Since Gladstone Capital Corporation’s incorporation in 2001, it has invested into more than 250 deals, worth $2.2 billion.
On January 12, Gladstone Capital Corporation reported its monthly per share dividend of $0.065, in line with previous. The dividend will be paid on January 31, to shareholders of record on January 21.
Publishing its third quarter financial results on November 15, Gladstone Capital Corporation posted earnings per share of $0.20, exceeding estimates by $0.01. Revenue for the period gained 14.17% year-over-year, reaching $14.36 million, beating estimates by $628,000.
A total of 4 hedge funds were long Gladstone Capital Corporation in the third quarter of 2021, with stakes valued at $3.1 million, down from 6 funds in the prior quarter with stakes amounting to $4.06 million in Gladstone Capital Corporation.
6. Sabine Royalty Trust (NYSE:SBR)
Dividend Yield as of January 14: 7.69%
Number of Hedge Fund Holders: 4
Sabine Royalty Trust (NYSE:SBR) owns royalty and mineral interests in notable oil and gas establishments around the United States, with properties in Florida, Louisiana, Mississippi, New Mexico, Oklahoma, and Texas. Sabine Royalty Trust’s shares have returned approximately 21% year-to-date. With a dividend yield of 7.69% on January 14, Sabine Royalty Trust is a notable high yield monthly dividend stock to invest in.
On January 13, Sabine Royalty Trust declared a $0.8768 per share monthly dividend, reflecting a 180.4% increase from the prior dividend of $0.3127. The dividend will be paid on January 31, to shareholders of record on January 18.
Among the hedge funds tracked by Insider Monkey as of Q3 2021, 4 funds reported owning stakes in Sabine Royalty Trust, worth $17.74 million. Leonard A. Potter’s Wildcat Capital Management is the biggest stakeholder of the company, holding 314,564 shares valued at $13.3 million.
Just like Exxon Mobil Corporation, International Business Machines Corporation, and AbbVie Inc., Sabine Royalty Trust is a notable stock to diversify an income portfolio.
5. PermRock Royalty Trust (NYSE:PRT)
Dividend Yield as of January 14: 8.07%
Number of Hedge Fund Holders: N/A
PermRock Royalty Trust (NYSE:PRT) was established in Delaware in 2017 as a statutory trust that invests primarily in oil and gas properties. As of January 14, PermRock Royalty Trust offers an 8.07% yield, making it one of the top high yield monthly dividend stocks to purchase.
PermRock Royalty Trust on December 20 declared a $0.0699 per share monthly dividend, which reflects an 11.8% increase from the prior dividend of $0.0625. The dividend was paid on January 14 to shareholders of record on December 31.
4. Prospect Capital Corporation (NASDAQ:PSEC)
Dividend Yield as of January 14: 8.22%
Number of Hedge Fund Holders: 7
Prospect Capital Corporation (NASDAQ:PSEC) is an American company engaging in sponsor-backed transactions and direct lending, offering private debt and equity to middle market companies.
Raymond James analyst Robert Dodd upgraded Prospect Capital Corporation on November 11 to Market Perform from Underperform without a price target. The company’s Q3 earnings beat, and NAV per share growth was above average and the analyst sees a risk/reward in-line with peers at current levels.
On November 8, Prospect Capital Corporation declared a $0.06 dividend per share, to be paid monthly on December 23, January 20, and February 17. The company offers an 8.22% yield as of January 14.
Publishing its Q3 results on November 8, Prospect Capital Corporation posted earnings per share of $0.21, exceeding estimates by $0.03. Revenue for the quarter gained 18.61% year-over-year, reaching $169.47 million, surpassing estimates by $3.16 million.
Among the hedge funds tracked by Insider Monkey during Q3 2021, Two Sigma Advisors is the leading Prospect Capital Corporation stakeholder, elevating its position in the company by 3875%, holding 1.97 million shares worth $15.2 million. Overall, 7 hedge funds were bullish on Prospect Capital Corporation at the end of September, down from 11 funds in the preceding quarter.
3. Stellus Capital Investment Corporation (NYSE:SCM)
Dividend Yield as of January 14: 8.48%
Number of Hedge Fund Holders: 2
Stellus Capital Investment Corporation (NYSE:SCM) is a Texas-based investment firm that offers senior secured debt and equity to lower middle market companies in the United States.
On October 28, Stellus Capital Investment Corporation announced earnings for the third quarter. The company posted a GAAP EPS of $0.66, exceeding estimates by $0.37. Revenue over the period came in at $17.03 million, up 21.49% from the prior-year quarter, outperforming estimates by $1.26 million.
Stellus Capital Investment Corporation declared a monthly per share dividend of $0.0933 on January 14, in line with previous. The dividend will be paid on February 15 to shareholders of record on January 28.
Oppenheimer analyst Mitchel Penn on November 1 upgraded Stellus Capital Investment Corporation to Outperform from Perform with a $15 price target after the Q3 results. The analyst credits the “strong” return on equity of 18.6% in the quarter and Stellus Capital Investment Corporation’s “high quality” portfolio for the upgrade.
In Q3 2021, Arrowstreet Capital and Two Sigma Advisors were long Stellus Capital Investment Corporation, with collective stakes totaling $15.95 million.
2. AGNC Investment Corp. (NASDAQ:AGNC)
Dividend Yield as of January 14: 9.41%
Number of Hedge Fund Holders: 16
AGNC Investment Corp. (NASDAQ:AGNC) is an American real estate investment trust that invests in residential mortgage securities and collateralized mortgage obligations which are backed by government-sponsored enterprises and state agencies.
On January 10, AGNC Investment Corp. announced a monthly per share dividend of $0.12, payable on February 9 to shareholders of record on January 31. The REIT offers a 9.41% yield as of January 14, and is one of the highest yielding monthly dividend stocks to purchase.
Reporting its third quarter results on October 25, AGNC Investment Corp. posted earnings per share of $0.75, beating estimates by $0.10. The $279 million revenue dropped 7.62% year-over-year, missing estimates by $19.63 million.
Piper Sandler analyst Kevin Barker on January 5 lowered the price target on AGNC Investment Corp. to $16 from $16.50 and kept a Neutral rating on the shares. The analyst expects Q4 mortgage banking earnings to be under pressure amid increasing competitive pressures across all channels due to reduced seasonal demand combined with excess capacity. He tells investors to seek out names that offer stable income, company-specific catalysts, and good valuation.
Among the 867 hedge funds monitored by Insider Monkey in the third quarter of 2021, 16 funds reported owning stakes worth $81.4 million in AGNC Investment Corp.. Joshua Friedman and Mitchell Julis’ Canyon Capital Advisors is the largest stakeholder of the company, with a $52.7 million position.
1. Ellington Financial Inc. (NYSE:EFC)
Dividend Yield as of January 14: 10.17%
Number of Hedge Fund Holders: 10
Ellington Financial Inc. (NYSE:EFC) is a company investing in multiple types of financial assets, such as residential and commercial mortgage-backed securities, mortgage loans, collateralized loan obligations, derivatives, equity investments, among other strategic investments.
On January 7, Ellington Financial Inc. declared a $0.15 per share monthly dividend, in line with previous. The dividend will be paid on February 25 to shareholders of record on January 31.
Ellington Financial Inc. announced on December 8 that it is proceeding with a Series B public stock offering to raise capital for acquiring its target assets and for other corporate expenses.
Publishing its third quarter results on November 8, Ellington Financial Inc. reported earnings per share of $0.46, missing estimates by $0.02. The Q3 revenue also missed consensus estimates.
Israel Englander’s Millennium Management is the leading Ellington Financial Inc. stakeholder, with 1.15 million shares worth $21.1 million. Overall, 10 hedge funds were bullish on the stock in the third quarter of 2021.
You can also take a look at 10 Most Popular Dividend Stocks Among Famous Hedge Funds and 11 Best Depressed Stocks To Invest In.
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This article is originally published at Insider Monkey.
