In this article, we discuss 16 highest paying monthly dividend stocks. You can skip our detailed analysis of dividend stocks and their performance over the years, and go directly to read 5 Highest Paying Monthly Dividend Stocks.
In the first half of 2023, dividend payers in the S&P 500 saw their stock prices increase by approximately 12%, while those that didn't pay dividends experienced a much higher increase of 37%, as of August.
Even though dividend stocks haven't shown strong performance recently, many investors remain determined to include these stocks in their portfolios because they offer a consistent source of income. When investors choose to invest in dividend stocks, they often prioritize high dividend yields. However, it's important to note that excessively high dividend yields can sometimes indicate financial instability or other underlying issues within the company. Dan Lefkovitz, a strategist for Morningstar Indexes, spoke about the importance of dividend yields in this Morningstar article. Here are some comments from the analyst:
“It’s really critical to be selective when it comes to buying dividend-paying stocks and chasing yield. Looking for the most yield-rich areas of the market can often lead you into troubled areas and dividend traps—companies that have a nice-looking yield that is ultimately unsustainable. You have to screen for dividend durability and reliability going forward.”
Analysts recommend paying more attention to companies that have consistently increased their dividends over a long time frame, rather than just looking at stocks with high dividend yields. To regularly pay dividends, a company must generate surplus cash beyond its operational needs. Therefore, dividend-paying companies are typically well-established, with a steady income and enough extra cash flow. Choosing a long-term dividend growth allows for the potential to increase returns through compounding. Dividends played a big role in the S&P 500 Index's returns in the last 30 years, with reinvested dividends contributing to slightly more than 42% of its overall gains. Some of the best dividend stocks that have grown their dividends over the years include The Procter & Gamble Company (NYSE:PG), Colgate-Palmolive Company (NYSE:CL), and PepsiCo, Inc. (NASDAQ:PEP).
In addition to yields and growth, investors often consider a company's dividend frequency when evaluating its suitability for their investment strategy, as it can impact the regularity and predictability of income from their investments. Monthly dividends are appealing to some investors because they help with better money management. With smaller, more frequent payments, it's easier for investors to budget and plan their finances. In this article, we have discussed the highest-paying monthly dividend stocks.
For this list, we looked at stocks that pay monthly dividends. Among them, we chose stocks with the highest dividend yields, which range from 10% to 26% as of October 5. Most of these stocks are from the REIT sector because they're obligated to distribute about 90% of their income to shareholders. However, it's important to note that many of these stocks, despite their high yields, don't have a consistent history of paying dividends and have experienced dividend reductions or pauses in the past. The stocks are ranked in ascending order of their dividend yields as of October 5.
Gladstone Capital Corporation (NASDAQ:GLAD) is an American business development company (BDC) that primarily focuses on providing debt and equity financing to small and medium-sized businesses in the country. The company currently pays a monthly dividend of $0.0825 per share, having raised it by 3.1% on July 12. This marked the company's third consecutive month of dividend growth, which makes it one of the best dividend stocks on our list. The stock has a dividend yield of 10.6%, as of October 5.
GLAD can be a good addition to dividend portfolios because of its monthly payouts alongside The Procter & Gamble Company (NYSE:PG), Colgate-Palmolive Company (NYSE:CL), and PepsiCo, Inc. (NASDAQ:PEP).
At the end of Q2 2023, 5 hedge funds in Insider Monkey's database reported having stakes in Gladstone Capital Corporation (NASDAQ:GLAD), the same as in the previous quarter. The collective value of these stakes is roughly $11 million.
Horizon Technology Finance Corporation (NASDAQ:HRZN) is a specialty finance company that primarily focuses on providing debt and equity financing to technology and life sciences companies in the US. The company currently pays a monthly dividend of $0.11 per share and has a dividend yield of 11.11%, as recorded on October 5. It is among the best dividend stocks on our list with the highest yields.
As of the close of Q2 2023, Schonfeld Strategic Advisors was the only stakeholder of Horizon Technology Finance Corporation (NASDAQ:HRZN), owning stakes worth $169,120.
Sabine Royalty Trust (NYSE:SBR) is a royalty trust that does not actively engage in business operations but rather derives its income from oil, natural gas, and other mineral interests. On September 5, the company declared a 22% hike in its monthly dividend to $0.3643 per share. The stock's dividend yield on October 5 came in at 11.13%.
At the end of June 2023, 7 hedge funds in Insider Monkey's database reported having stakes in Sabine Royalty Trust (NYSE:SBR), up from 6 in the previous quarter. The overall value of these stakes is over $10.6 million. Among these hedge funds, Citadel Investment Group was the company's leading stakeholder in Q2.
SLR Investment Corp. (NASDAQ:SLRC) is an American business development company that specializes in providing financing and capital solutions to middle-market companies. On September 5, the company announced a monthly dividend of $0.1366 per share, which was in line with its previous dividend. The stock has a dividend yield of 11.24%, as of October 5.
Insider Monkey's database of Q2 2023 indicated that 4 hedge funds owned stakes in SLR Investment Corp. (NASDAQ:SLRC), up from 3 a quarter earlier. The collective value of these stakes is over $2.7 million.
12. Generation Income Properties, Inc. (NASDAQ:GIPR)
Dividend Yield as of October 5: 11.70%
Generation Income Properties, Inc. (NASDAQ:GIPR) is next on our list of the best dividend stocks with the highest yields. The internally managed real estate investment trust company currently offers a monthly dividend of $0.039 per share and has a dividend yield of 11.70%. The company started its dividend policy in 2022 and has paid regular dividends to shareholders since then.
11. PennantPark Floating Rate Capital Ltd. (NYSE:PFLT)
Dividend Yield as of October 5: 11.53%
PennantPark Floating Rate Capital Ltd. (NYSE:PFLT) primarily focuses on providing debt and other financing solutions to middle-market companies in the United States. As a BDC, its primary mission is to support the growth and development of these middle-market businesses by offering them capital and financial resources.
PennantPark Floating Rate Capital Ltd. (NYSE:PFLT) is one of the best dividend stocks on our list as the company has been paying regular dividends to shareholders since 2016. The company offers a monthly dividend of $0.1025 per share for a dividend yield of 11.53%, as of October 5.
The number of hedge funds tracked by Insider Monkey having stakes in PennantPark Floating Rate Capital Ltd. (NYSE:PFLT) grew to 9 in Q2 2023, from 4 in the previous quarter. The total value of these stakes is roughly $40 million.
An American business development company, Prospect Capital Corporation (NASDAQ:PSEC) is next on our list of the best dividend stocks with monthly payments and highest yields. On August 29, the company announced a monthly dividend of $0.06 per share, which was consistent with its previous dividend. It has been making uninterrupted dividend payments to shareholders for the past 70 consecutive months. As of October 5, the stock has a dividend yield of 12.22%.
As of the end of Q2 2023, 4 hedge funds tracked by Insider Monkey reported having stakes in Prospect Capital Corporation (NASDAQ:PSEC), compared with 7 in the previous quarter. The total value of these stakes is more than $4.3 million. McKinley Capital Management was the company's largest stakeholder in Q2.
9. Stellus Capital Investment Corporation (NYSE:SCM)
Dividend Yield as of October 5: 12.29%
Stellus Capital Investment Corporation (NYSE:SCM) is a Texas-based BDC that provides financing and capital solutions to middle-market companies. The company offers a monthly dividend of $0.1333 per share, having raised it by 43% in January this year. The stock's dividend yield on October 5 came in at 12.29%.
As of the end of Q2 2023, 4 hedge funds in Insider Monkey's database reported having stakes in Stellus Capital Investment Corporation (NYSE:SCM), compared with 3 in the previous quarter. The consolidated value of these stakes is over $11.2 million. Among these hedge funds, Millennium Management was the company's largest stakeholder in Q2.
Dynex Capital, Inc. (NYSE:DX) is an American real estate investment trust company that primarily focuses on investing in mortgage-backed securities and other financial assets related to the residential and commercial real estate markets.
Dynex Capital, Inc. (NYSE:DX), one of the best dividend stocks on our list, currently pays a monthly dividend of $0.13 per share. The stock's dividend yield on October 5 came in at 13.77%.
At the end of Q2 2023, 12 hedge funds in Insider Monkey's database owned investments in Dynex Capital, Inc. (NYSE:DX), up from 11 in the previous quarter. The total value of these stakes is over $57.7 million. With over 1.7 million shares, Balyasny Asset Management was the company's largest stakeholder in Q2.
An American business development company, Oxford Square Capital Corp. (NASDAQ:OXSQ) currently pays a monthly dividend of $0.035 per share. The stock offers a dividend yield of 14.05%, coming through as one of the best dividend stocks on our list.
As of the close of Q2 2023, 6 hedge funds tracked by Insider Monkey reported holding stakes in Oxford Square Capital Corp. (NASDAQ:OXSQ), up from 4 in the previous quarter. The consolidated value of these stakes is over $3.6 million.
Ellington Financial Inc. (NYSE:EFC) is next on our list of the best dividend stocks that pay monthly dividends to shareholders. The specialty finance company offers a monthly dividend of $0.15 per share and has a dividend yield of 14.93%, as of October 5. In the second quarter of 2023, the company's distributable earnings amounted to over $25.7 million.
In addition to EFC, The Procter & Gamble Company (NYSE:PG), Colgate-Palmolive Company (NYSE:CL), and PepsiCo, Inc. (NASDAQ:PEP) are some best dividend stocks investors are paying attention to.
The number of hedge funds in Insider Monkey's database owning stakes in Ellington Financial Inc. (NYSE:EFC) stood at 6 in Q2 2023, growing from 5 in the previous quarter. The collective value of these stakes is roughly $17 million.
