[Editor’s note: “6 Monthly Dividend Stocks to Buy” was previously published in Sept. 2019. It has since been updated to include the most relevant information available.]
Most dividend stocks pay their shareholders quarterly, but a few dividend-yielding stocks offer monthly distributions. The group is small: less than 100, with many of the offerings being exchange-traded funds (ETFs) or closed-end actively managed funds. And so investors looking for monthly dividend stocks to buy are limiting their universe quite a bit.
But there are quite a few attractive dividend-yielding stocks that pay out monthly. Several offer compelling cases for both their upside and safe dividends, with attributes that go beyond simply the timing of their distributions.
These six stocks all fit that bill, offering not only monthly dividends but potential share price appreciation and reasonable payout ratios.
Realty Income (O)
Realty Income (NYSE:O) is the best-known of the monthly dividend payers, to the point that it has trademarked the slogan “The Monthly Dividend Company.”
In terms of past performance, the monthly payouts have been just the cherry on top of a delicious sundae. O stock has returned — including dividends — an average of 15.8% annually since 1994, according to an investor presentation. It has been one of the best-performing real estate investment trusts in the market over that stretch.
O stock has become much more expensive over the past few months, bouncing nearly 35% over the last year. But there’s still a nice bull case at the moment. O yields 3.33%,
The portfolio looks both safe and nicely diversified, with Walgreens Boots Alliance(NASDAQ:WBA) and FedEx (NYSE:FDX) being its two largest tenants. Considering Realty Income’s track record, it’s worth staying long.
LTC Properties (LTC)
Like with O stock, there’s still a solid bull case for senior housing and healthcare property REIT LTC Properties (NYSE:LTC).
With the “baby boom” generation aging, demand should stay strong. Meanwhile, LTC still yields nearly 5%.
There are some risks now: investors are concerned that changing healthcare insurance reimbursement policies will impact LTC’s tenants. The stock actually hit a five-year low earlier this year as a result. But sentiment has improved — and should continue to do so.
With LTC still trading at a reasonable 19 P/E, the shares could rally. Add to that its yield, paid monthly, and it’s definitely worth a look.
Shaw Communications (SJR)
Canadian telecommunications company Shaw Communications (NYSE:SJR) hasn’t posted particularly strong performances over the past few years, but SJR actually has added about 12% over the past year.
There are some concerns about the wireless industry in Canada, much as there are in the U.S.
But with a 4.5% dividend yield and a 19.7x forward price-to-earnings multiple, SJR isn’t pricing in much improvement. With 5G a potential catalyst in the mid-term, there’s a nice case for SJR stock at current levels.
Dividends are announced in Canadian dollars, which can affect the payouts received by American investors. Still, a monthly dividend, a 4.5% yield and potential upside provide a nice combination here.
Apple Hospitality REIT (APLE)
Apple Hospitality REIT (NYSE:APLE) owns 241 hotels in the U.S. — 115 of the hotels operate under the Marriott (NASDAQ:MAR) banner, with the remaining 126 flying under the Hilton(NYSE:HLT) flag.
Those two strong brands underpin a strong portfolio. Geographic diversification limits downside risk as well. With an impressive 7.3% yield paid monthly, that makes APLE one of the best dividend-yielding stocks in terms of monthly income.
The story admittedly isn’t perfect. Growth has been relatively meager, and APLE’s dividend has stayed at 10 cents per share per month since a 2015 IPO.
Investors would have been much better off buying either MAR or HLT, both of which have better than doubled from early 2016 lows.
But for income-focused investors, APLE looks like a strong pick.
Pembina Pipeline (PBA)
Pembina Pipeline (NYSE:PBA) is the biggest company on this list and the riskiest. Pipeline companies generally are lower-risk plays in the oil and gas space, but Pembina does have some concerns.
Canadian oil stocks have struggled of late, and Pembina levered up to acquire Veresen last year.
That said, there’s still a lot to like here. Earnings increased in the double-digits last year, largely due to the acquisition. PBA pays a solid 5.2% dividend. Valuation is relatively reasonable against U.S. rivals like Kinder Morgan (NYSE:KMI) and Plains All American Pipeline (NYSE:PAA).
If Pembina can continue to grow once the Veresen acquisition is fully integrated, there should be a nice upside on top of the nearly 5.2% yield.
STAG Industrial (STAG)
STAG Industrial (NYSE:STAG) isn’t necessarily a spectacular stock, but it’s one that can drive steady long-term returns along with monthly payouts.
The company leases industrial buildings to single tenants and has a nicely diversified portfolio from both a customer and a geographic standpoint. The average lease length currently is nearly five years, which should keep recent dividend growth intact.
Longer-term, there are minor concerns. Valuation isn’t cheap, with a forward P/E of nearly 80. An economic downturn could lead to lease cancellations or even customer bankruptcies. Investors focused on value might want to wait for a cheaper price than the current stock price of $31.
But investors looking for growing monthly dividend payouts don’t have a ton of options, and STAG very well might be the best one.
As of this writing, Vince Martin did not hold a position in any of the aforementioned securities.