You will be surprised by the number of Americans who live solely on their salaries to survive. According to CNBC, inflation has caused 64% of Americans to live from paycheck to paycheck. Since you cannot live on your salary alone due to uncertainties like inflation, it is time to consider another means of earning income like monthly dividend stocks. Monthly dividend stocks are securities that pay a dividend every month, unlike others paid quarterly or annually. Thanks to these securities, you can get paid anytime as you wait for your monthly salary. So, which monthly dividend stocks should you consider for your portfolio? Here is a list of ten companies to choose from alongside their dividend yields.
10. Pembina Pipeline Corp. (5.0%)
This is a Canadian pure-play energy infrastructure company. The company owns a series of pipelines that transport various natural gas products and hydrocarbon liquids to western Canada. Thanks to the increased prices of crude and oil natural gas liquids, the company steadily grew. Even during the 2020 COVID-19 pandemic, when companies nearly collapsed, they still managed to grow. It grew during the pandemic since it is a better insulated company.
9. LTC Properties (6.15%)
This REIT invests in skilled nursing properties and senior housing, i.e., 50% in skilled nursing properties and 50% in senior housing. It owns 193 investments in 28 states and enjoys a market capitalization of $1.3 billion. It has greatly benefitted from the increase in the elderly position. At some point, the company became bankrupt, which slowed its growth. Thankfully, it recovered since it had assets in states with the highest population of senior citizens.
8. Main Street Capital Corp. (6.45%)
The company operates as a lender to lower middle-market companies. According to Chief Executive, a company qualifies to be a lower middle market company if it receives annual revenues between $5 million and $100 million. So far, it has invested in roughly 200 private companies to help them finance its growth and ongoing operations. Its growth stems from its strategy of driving investment returns, e.g., rewarding investors who own this stock as the Business Development Company (BDC) sustains its high monthly dividend.
7. EPR Properties (6.63%)
This company is a REIT that focuses on recreation, education, and entertainment properties. As a triple net lease company, it works with tenants who pay three costs associated with real estate: insurance, taxes, and maintenance. By operating as a triple net lease company, the company enjoys reduced operating expenses. Due to the reduced expenses, the company has invested more than $6.4 billion in 353 locations in the United States and Canada.
6. Gladstone Commercial (7.78%)
Gladstone Commercial is a Real Estate Investment Trust (REIT) that puts resources into single-occupant and secured multi-inhabitant net rented resources. The company has a diverse portfolio. By the end of December 2021, its portfolio comprised 129 properties in 27 states leased to 108 different tenants. There are many factors that have led to this growth. First, their portfolio is mainly aimed toward long-term agreements. Also, the company enjoys high occupancy rates, which include a current rate of 97.2%. Since 2003, its occupancy rate has never fallen below 95%. Lastly, the company is able to have a high-quality portfolio of clients due to the reliance on rated investment-grade tenants.
5. PennantPark Floating Rate Capital Ltd. (8.3%)
It is a BDC that provides debt financing services such as mezzanine loans, private high-yield debt, and first lien secured debt. The company makes debt investments in middle-market companies. Its portfolio is mostly floating rate, which means its yields can easily open up to interest rate volatility. As a result, its yields increase when the rates rise but decline when the rates are unfavorable. Despite the equal odds of its yields declining, the company has had a track record of successful investments.
4. Stellus Capital Investment Corp. (8.84%)
It is a BDC that invests in small companies at their early stages of growth. The firm makes equity and debt investments in private middle-market companies. Its investments are in various industries like healthcare, energy, technology, industrial, business services, etc. Since it has many investment opportunities, the company is able to choose the best investments. So, a major factor contributing to its growth is its growing investment portfolio.
3. Prospect Capital (9.64%)
Prospect Capital is one of the largest BDCs and currently has over $8.1 billion of assets. It is the major provider of private debt financing and private equity to middle-market companies. The company has grown largely due to lack of competition. That is because the company was able to better serve middle-market companies by offering a 'sweet spot' in terms of services. For instance, middle-market companies are too large to be served by business representatives of retail banks and too small to be customers of commercial banks.
2. Dynex Capital (9.79%)
Dynex Capital is a mortgage REIT that has invested in mortgage-backed securities (MBS) on a leveraged basis in the United States. It invests in agency and non-agency MBS. A key reason for its growth is its internal management. The management's role is to reduce conflicts of interest. Also, the management has reduced operating expenses by increasing total equity.
1. Horizon Technology Finance Corp. (10.17%)
It is an organization that provides structured debt products to life science and technology companies. Besides getting paid monthly, its dividend yield is reason enough to draw you to this company. If you are wondering why they offer such a high yield, it is because they make massive returns from capital appreciation potential through warrants and directly originated senior secured loans. Another reason to consider this company is its massive growth. The total investment income grew by 7.5% between 2021 and 2022.
Most investors buy dividend stocks without factoring in the company's history. Remember, you may purchase monthly dividend stocks from a failing company, and you will not enjoy any returns. So, before you buy them from a company, please research the tactics the company used to ensure it maintained steady growth. That is because as the company grows, so will your dividend stocks. By choosing the right company, you will earn some decent income as you work in your main job.
Written by Allen Lee
Read more posts by Allen Lee