Monthly dividend stocks are rare, but investors like them for a reason. If you’re retired, stocks that pay dividends monthly are a perfect source of regular income you can use to pay bills, rent or buy groceries. Non-retirees also find monthly dividends attractive because they compound faster.
But as I said, there aren’t very many monthly dividend stocks, and only a handful of them are good investments. However, the ones that are worth buying can be quite high-yielding, and offer enviably consistent monthly income.
Today, I’ve rounded up all the monthly dividend stocks that I think are worth your time, with details on the dividend, yield and background of each.
Best Monthly Dividend Stock #1: Chatham Lodging Trust (CLDT)
Monthly Dividend: $0.11
Chatham Lodging Trust is a hotel REIT (Real Estate Investment Trust). (A REIT is a special kind of company developed to offer investors a high yield.) The company buys existing hotels that it believes it can add value to by re-branding, renovating or changing management. Its brands include Marriott, Hyatt and Hilton.
The REIT has paid dividends consistently since coming public in 2010, and began paying monthly dividends in 2013.
Who doesn't? You can easily find them in this FREE Special Report:
Cabot’s Best Dividend Stocks
You get this free report and many others relevant to these current times when you sign up for Cabot Wealth Daily, our free wealth-building advisory.
Revenues have increased in each of the last three years. Analysts expect Chatham’s revenues to grow by about 6% this year, and by 3% next year. That’s slow and steady growth, but should be enough to maintain CLDT’s 6%-plus yield.
Technically, CLDT peaked in late 2014, and then began a year-long downtrend that made 40% of the stock’s value disappear. The stock has traded in a wide range for most of the last two years, and faces overhead resistance around 24. However, CLDT did recently pop above its 50-day moving average for the first time since the start of the year, which could signal the beginning of a new uptrend.
Best Monthly Dividend Stock #2: Gladstone Commercial Corp. (GOOD)
Monthly Dividend: $0.13
Gladstone Commercial is another REIT, but it primarily owns office and industrial properties. The company owns 94 properties, and its biggest tenant is GM.
The company has been public since 2003 and has paid monthly dividends since 2005. The dividend is very reliable—it has held steady at 13 cents per month since 2008. At the current price, GOOD yields over 8%.
Revenues have increased in each of the last five years, so a dividend increase could be in the future soon. And GOOD the stock managed to cross back above its 50-day moving average recently, so the future looks bright.
Best Monthly Dividend Stock #3: Gladstone Land Corp. (LAND)
Monthly Dividend: $0.04
Gladstone Land Corp is also a REIT. But, as you might suppose from its name and stock symbol, Land Corp owns and leases farmland. The REIT offers better dividend growth than its commercial sibling; LAND has already increased its dividend four times in the last 12 months (from 4.3 cents to 4.43 cents). And LAND has paid dividends every month since coming public in 2013.
Revenues have increased every year since the IPO as well, and analysts expect double-digit growth this year and next.
LAND declined for most of 2014 and 2015, finally bottoming in early 2016. The stock spent the next year trending up, and is now consolidating a bit below its late-2017 highs. At the current price, LAND yields over 4%. Investors who want diversified real estate exposure can consider adding some LAND to their portfolios.
Best Monthly Dividend Stock #4: Main Street Capital Corp. (MAIN)
Monthly Dividend: $0.19
Main Street is a business development company with a current yield of nearly 6%. The company invests in and lends to small and medium-sized businesses.
MAIN has been public since 2007, and revenues have increased every year since 2010. Management has increased the dividend every year since 2011. But they like to keep the dividend at a sustainable level, and distribute excess cash (usually capital gains) to shareholders through semi-annual special dividends. The strategy adds a margin of safety to the regular dividends: dividends have been fully covered by net investment income since 2011.
MAIN floundered for most of 2014 and 2015, along with most other BDCs. Investors feared that low oil prices would trigger a wave of defaults among small energy companies, who are overrepresented in BDC portfolios. By the end of 2015, it became clear that the damage wouldn’t be nearly as bad as feared, and MAIN began a steady climb to new highs.
MAIN began another correction at the end of 2017, along with most other high-yield investments, but looks to have bottomed in February. The stock can be choppy, but has hit numerous new all-time highs over the past two years as investors scoop it up for its high and frequent dividends.
Best Monthly Dividend Stock #5: Realty Income Corp. (O)
Monthly Dividend: $0.22
As the name implies, Realty Income is a REIT that is serious about income, with the distinctive ticker symbol O. Founded to provide investors with rising monthly income, O has paid a dividend every month since coming public in 1994, and has increased the dividend every year since 1996. Today, the REIT yields 5.0%.
Realty Income owns over 5,000 properties, mostly free-standing commercial buildings leased to non-discretionary retailers like convenience stores, dollar stores and drug stores.
Because of its strong track record, O is one of the largest, most well-known and widely held of the monthly dividend payers. The stock has relatively low volatility, and after a recent pullback is now well-priced for investors looking for monthly income.
Best Monthly Dividend Stock #6: Pembina Pipeline Corp (PBA)
Monthly Dividend: $0.15
Pembina is a Canadian pipeline company, which transports, refines and stores oil and natural gas. PBA pays monthly dividends in Canadian dollars; the current dividend of 19 Canadian cents per share is worth about 15 U.S. cents at current exchange rates, for a yield of about 6.6%.
Pembina is growing revenues and earnings through capital improvement projects and acquistions. The company acquired its next-largest competitor, Veresen, in summer 2017, solidifying its position as the third-largest pipeline network in Canada and better diversifying its income streams.
Since converting from an income trust to a corporation in 2010, Pembina has paid dividends every month, and has raised the dividend every year. Pembina also paid monthly dividends for 13 years before converting to a corporation, and has never decreased the dividend.
Please note that dividends Canadian companies pay to U.S. Residents are usually subject to a 15% Canadian withholding tax, unless the shares are held in a qualified retirement account.
Best Monthly Dividend Stock #7: Shaw Communications (SJR)
Monthly Dividend: $0.08
Shaw Communications is a major Canadian telecom. The company provides phone, internet, TV and mobile service, mostly in British Columbia and Alberta. Revenues typically rise by low single digits each year, analysts currently expect 4% to 5% sales growth this year and next.
Shaw has used this reliable income stream to pay monthly dividends since 2005. While U.S. investors will see their dividends vary a bit from month to month due to exchange rates, Shaw has steadily grown the dividend over the past 12 years, and now yields 4.5%.
The stock ran into trouble in 2015, but started a new uptrend in early 2016. After a sharp correction near the start of this year, SJR’s forward P/E has come down to 21, offering a decent buying opportunity for investors looking for a low-risk source of monthly income.
Best Monthly Dividend Stock #8: Stag Industrial (STAG)
Monthly Dividend: $0.12
Stag Industrial is a REIT that owns industrial properties across the U.S. The company is benefiting from the e-commerce boom thanks to its large portfolio of warehouses. Warehouse space is in high demand as Amazon and online competitors expand. Stag is investing accordingly, and revenues have increased steadily every year since the REIT came public in 2012. In 2018 and 2019, analysts expect revenues to rise 17% and 13%.
Stag passes most of that cash on to investors. Stag has paid monthly dividends since 2013, and has increased its dividend every year for the past six years, including two increases in just the last 12 months. At current prices, STAG’s monthly payout of 12 cents per share works out to a yield of 5.9%, making STAG a good choice for investors who want high monthly income along with a good growth story.
Timothy Lutts heads one of America’s most respected independent investment advisory services. Each week, Tim personally picks the single best stock in his exclusive Cabot Stock of the Week advisory. Build your wealth and reduce your risk with the top stock each week for current market conditionsLearn More
*This post has been updated from an original version published in 2017.