We recently compiled a list of the 11 Best Stocks That Pay Monthly Dividends in 2024. In this article, we are going to take a look at where STAG Industrial, Inc. (NYSE:STAG) stands against the other stocks that pay monthly dividends.

Dividend stocks have long been a favorite among investors, regardless of the payout frequency. Companies, however, are deliberate in determining how often to reward their shareholders. Annual and semi-annual dividends might provide larger payouts, but their unpredictability can be challenging for investors. While major firms opt for quarterly payouts due to practicality, some choose monthly distributions, which many investors find attractive for the steady stream of passive income. In addition, a reduction in monthly payouts would have a smaller immediate impact, and receiving dividends monthly is one of the closest alternatives to a regular paycheck, simplifying the management of day-to-day finances. That said, history suggests that companies offering monthly dividends often boast higher yields but may lack consistent dividend policies.

Regardless of market conditions, dividend stocks can be a useful tool for enhancing income and boosting portfolio growth potential. For instance, investors who are years away from retirement often reinvest their dividends to increase returns. According to an estimate by Charles Schwab, a hypothetical $10,000 investment in a broader market at the end of 1993 would have grown to over $182,000 by the end of 2023 if dividends were reinvested, compared to only $102,000 if they had not been reinvested.

Also read: 10 Biggest Dividend Cuts and Suspensions of 2024

This means that investors looking to reduce their risk while still maintaining growth potential may want to consider high-quality dividend-paying companies. This approach is favored by Ramona Persaud, manager of Fidelity Equity-Income Fund and Fidelity Global Equity Income Fund. She tends to focus on shares of high-quality firms that offer attractive valuations and strong dividends. Persaud pointed out that falling interest rates can create a favorable environment for dividend stocks, as their yields become more appealing compared to declining bond yields. She also mentioned that lower interest rates may lead to gains across a wider range of stocks, a shift from the past two years when market gains were largely driven by a few large-cap growth stocks. Here are some other comments from the analyst:

“I’m excited that really good companies may get more credit from investors than they have during the wave of glamour stocks. And investors stand to gain from the stocks’ dividend payments.”

Persaud prioritizes stocks with strong balance sheets, high potential returns on investment, and predictable cash flows. Additionally, she seeks out stocks with attractive dividend yields relative to similar companies and the broader market. Monthly dividend stocks also focus on high dividend yields, which can be a key draw. While high yields may sometimes indicate the possibility of dividend cuts or weaker balance sheets, many monthly dividend companies have been increasing their payouts for years and also maintain solid financial health. However, investors should exercise caution when investing in these stocks.

High dividend yields are not inherently negative. Stocks with high yields can still uphold strong dividend policies if their business fundamentals are solid. Many companies with above-average yields have consistently paid and even increased their dividends over time. Research indicated that, in the long run, these stocks often provide superior returns. For instance, a University of Nevada study found that portfolios consisting of the top 10 highest dividend yield stocks from the Dow 30 index outperformed those with medium and low dividend yields between 1987 and 2012. The study also highlighted that investing in high dividend yield stocks can be profitable over the long term, despite potential short-term fluctuations in returns. In view of this, we will take a look at some of the best dividend stocks that pay monthly dividends.

Our Methodology:

For this list, we reviewed a list of companies providing monthly dividends to their shareholders. Among these, we specifically chose businesses with robust dividend practices, consistently maintaining their payouts across multiple years. The majority of these selected companies operate within the Real Estate Investment Trust (REIT) sector, as they are required to allocate 90% of their income towards dividends. From that list, we picked 11 stocks with the highest number of hedge fund investors, using Insider Monkey’s Q3 2024 database of 900 hedge funds and their holdings.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here).

STAG Industrial, Inc. (NYSE:STAG)

Number of Hedge Fund Holders: 26

STAG Industrial, Inc. (NYSE:STAG) is an American real estate investment trust company that has a diversified portfolio of industrial properties, including warehouses and light manufacturing facilities. These properties are leased to high-quality tenants through long-term contracts, with rents increasing annually by an average of 2.8% in 2024. The strong demand for industrial real estate, driven by the rise of e-commerce and the trend of bringing manufacturing back to local markets, has allowed the company to secure significantly higher rental rates when existing leases expire. In 2024, new and renewed leases for the same spaces are seeing rental increases of 30%.

In the third quarter of 2024, STAG Industrial, Inc. (NYSE:STAG) reported revenue of $190.7 million, up 6.4% from the same period last year. The revenue exceeded analysts’ estimates by $1.82 million. During the quarter, the company generated Cash Available for Distribution of $88.0 million. It also acquired six buildings totaling 613,839 square feet for $113.0 million, achieving a Cash Capitalization Rate of 6.7% and a Straight-Line Capitalization Rate of 7.2%. As of September 30, 2024, the company achieved an overall occupancy rate of 97.1% across its entire portfolio, with the operating portfolio reaching an occupancy rate of 97.8%.

STAG Industrial, Inc. (NYSE:STAG) offers a monthly dividend of $0.1233 per share and has a dividend yield of 4.37%, as of December 28. It is one of the best dividend stocks on our list as the company has never missed a dividend since 2011.

As per Insider Monkey’s database of Q3 2024, 26 hedge funds were bullish on STAG Industrial, Inc. (NYSE:STAG), compared with 28 in the previous quarter. The stakes held by these funds have a total value of nearly $142 million.

Overall STAG ranks 2nd on our list of the best stocks that pay monthly dividends in 2024. While we acknowledge the potential of STAG as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than STAG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. 

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Disclosure: None. This article is originally published at Insider Monkey.