10 Monthly Dividend Stocks with Over 5% Yield
Over the years, reinvesting dividends has produced tremendous returns. From 1993 to 2018, the S&P 500’s annual average return including dividend reinvestment stood at 9.7%, compared with a 7.5% return excluding dividends, as reported by Schroders.
Dividend stocks saw a difficult time during the pandemic when some of the major dividend-paying companies were forced to trim their payouts in the face of financial instability. However, after the pandemic, many companies have returned to their healthy state, awarding shareholders solid dividends and stock buybacks. According to Goldman Sachs, the value of buybacks among the S&P 500 is expected to reach $1 trillion in 2022, up 12% from 2021.
Since the beginning of 2022, global financial markets suffered their worst, with the US S&P 500 concluding its worst first half since 1970. As we enter the second half of the year, analysts expect a further decline in the stock market, with over 40% of them considering inflation as the biggest external threat to their businesses and expecting the situation to persist for the rest of the year. However, investors seek to survive the situation through dividend income, as 42% of the analysts surveyed by CNBC believed that it’s time to invest in high-paying dividend companies, while only 3% maintained an interest in smaller high-growth tech stocks. This is further supported by the returns of iShares Core High Dividend ETF, which is up 0.26% year-to-date, compared with an 18.3% decline of the broader market during the same time, as of the close of July 8.
Over the years, investors have widely taken notice of major dividend stocks, such as Johnson & Johnson (NYSE:JNJ), The Coca-Cola Company (NYSE:KO), and Merck & Co., Inc. (NYSE:MRK). These companies hold long track records of consistent dividend growth, with solid balance sheets. However, in this article, we will explore monthly dividend stock with over 5% yield.
10 Monthly Dividend Stocks with Over 5% Yield
10. LTC Properties, Inc. (NYSE:LTC)
Dividend Yield as of July 8: 5.96%
LTC Properties, Inc. (NYSE:LTC) is a California-based real estate investment trust company that invests in healthcare and senior housing facilities.
LTC Properties, Inc. (NYSE:LTC) started paying quarterly dividends as soon as it was incorporated in 1992. Since 2005, it has paid uninterrupted monthly dividends to shareholders, making it one of the best monthly dividend stocks. With improving revenue consecutively in the last two quarters, LTC Properties, Inc. (NYSE:LTC) is expected to improve its payout ratio in the upcoming quarters. The stock’s dividend yield came in at 5.96%, as of July 8.
In June, BMO Capital upgraded LTC Properties, Inc. (NYSE:LTC) to Buy while lifting its price target to $40. The firm appreciated moderating agency costs and the company’s improving financials.
As per Insider Monkey’s Q1 2022 database, 7 hedge funds owned stakes in LTC Properties, Inc. (NYSE:LTC), down from 8 a quarter earlier. The collective value of these stakes stood at $16.1 million, compared with $7.2 million worth of stakes owned by hedge funds in Q4 2021.
In addition to Johnson & Johnson (NYSE:JNJ), The Coca-Cola Company (NYSE:KO), and Merck & Co., Inc. (NYSE:MRK), LTC Properties, Inc. (NYSE:LTC) is also one of the prominent dividend stocks to consider.
9. EPR Properties (NYSE:EPR)
Dividend Yield as of July 8: 6.76%
EPR Properties (NYSE:EPR) is an American real estate investment trust company that mainly invests in entertainment properties. The stock has rebounded nicely in 2022, gaining 1.92% in the last six months, as of the close of July 8.
EPR Properties (NYSE:EPR) froze its dividends in 2020 due to the pandemic and reinstated monthly payouts a year later. On June 28, the company announced a monthly dividend of $0.275 per share, raising it by 10% in March. In the first quarter of 2022, it paid nearly $27 million in dividends, up from $25 million during the same period last year. Though the company’s payout ratio is a little unstable at 76%, it has allocated between $500 million to $700 million for shareholder returns for FY22, signaling further dividend growth. The stock’s dividend yield was recorded at 6.76% on July 8.
Janney Montgomery Scott upgraded EPR Properties (NYSE:EPR) in July to Buy, from Neutral, highlighting the company’s revenue growth over the years.
At the end of Q1 2022, 25 hedge funds tracked by Insider Monkey had investments in EPR Properties (NYSE:EPR), worth $225.5 million. Among these hedge funds, Millennium Management was the company’s leading shareholder in Q1.
8. PennantPark Floating Rate Capital Ltd. (NYSE:PFLT)
Dividend Yield as of July 8: 9.46%
PennantPark Floating Rate Capital Ltd. (NYSE:PFLT) is a US-based externally-managed investment company that invests in middle-market companies.
On July 5, PennantPark Floating Rate Capital Ltd. (NYSE:PFLT) announced a monthly dividend of $0.095 per share, in line with its previous dividend. The company has not raised its dividend for more than five years. However, monthly payouts have been stable for the past 10 years consistently. In Q1 2022, it paid nearly $4 million in dividends, compared with $2.27 million of payments made during the same period last year. Moreover, its payout ratio has also improved from 242.5% in 2020 to 110.6% in 2022. The stock’s dividend yield was recorded at 9.46% on July 8.
According to Insider Monkey’s Q1 data, 7 hedge funds held positions in PennantPark Floating Rate Capital Ltd. (NYSE:PFLT), up from 3 a quarter earlier. The combined value of the stakes owned by those funds stood at $12.6 million, compared with $5 million worth of stakes in Q4 2021. Two Sigma Advisors was the company’s largest shareholder in Q1.
7. Dynex Capital, Inc. (NYSE:DX)
Dividend Yield as of July 8: 9.69%
Dynex Capital, Inc. (NYSE:DX) is a Virginia-based real estate investment trust company that invests in mortgage-based securities on a leveraged basis.
Dynex Capital, Inc. (NYSE:DX) has been making consecutive dividend payments for the past 13 years and hasn’t raised its dividend during this period. The company’s current monthly payout stands at $0.13 per share, with a yield of 9.69%, as of July 8. In Q1 2022, Dynex Capital, Inc. (NYSE:DX)’s payout ratio stood at 82.9%, which is normal for the mREIT sector. However, if the earnings start to decline in the upcoming quarters, the payout ratio could exceed the 100% mark by the start of 2023, which doesn’t bode well for the stock.
In June, Keefe Bruyette upgraded Dynex Capital, Inc. (NYSE:DX) to Outperform, with an $18.75 price target, up from $17, presenting a positive outlook on mortgage-based securities.
As of the quarter ended March 2022, 6 hedge funds in Insider Monkey’s database owned stakes in Dynex Capital, Inc. (NYSE:DX), up from 4 a quarter earlier. These stakes hold a collective value of nearly $19 million. Among these hedge funds, Balyasny Asset Management held the largest position in the company in Q1, with stakes valued at over $11.6 million.
6. Prospect Capital Corporation (NASDAQ:PSEC)
Dividend Yield as of July 8: 9.77%
Prospect Capital Corporation (NASDAQ:PSEC) is a business development company based in New York, that makes debt and equity investments in US middle-market businesses.
Though Prospect Capital Corporation (NASDAQ:PSEC) slashed its dividends in 2015 and 2017, the company’s consistent dividend payments have been reaching shareholders since its inception in 2004. The total dividends paid to date are valued at over $3.5 billion. Prospect Capital Corporation (NASDAQ:PSEC) currently pays a monthly dividend of $0.06 per share, with a yield of 9.77%, as of the close of July 8.
At the end of Q1 2022, Two Sigma Advisors was the largest stakeholder of Prospect Capital Corporation (NASDAQ:PSEC), with shares worth over $11 million. Overall, 6 hedge funds in Insider Monkey’s database have over $18.4 million invested in the New York-based company in Q1.
Just like famous dividend stocks, such as Johnson & Johnson (NYSE:JNJ), The Coca-Cola Company (NYSE:KO), and Merck & Co., Inc. (NYSE:MRK), Prospect Capital Corporation (NASDAQ:PSEC) also offers stable income to investors.
5. Horizon Technology Finance Corporation (NASDAQ:HRZN)
Dividend Yield as of July 8: 10.10%
Horizon Technology Finance Corporation (NASDAQ:HRZN) is a
specialty finance company that provides structured debt products to life sciences and tech companies.
Horizon Technology Finance Corporation (NASDAQ:HRZN) has been making dividend distributions consecutively for the past 10 years, with a 5-year track record of paying monthly dividends. The company hasn’t raised its dividends for a long time and is not expected to do so in the next two years as well. However, its payout ratio of 89% has improved from 171.4% in 2020. Horizon Technology Finance Corporation (NASDAQ:HRZN) currently offers a monthly dividend of $0.10 per share, with a yield of 10.10%, as of July 8.
In May, Compass Point upgraded Horizon Technology Finance Corporation (NASDAQ:HRZN) to ‘Neutral’ from ‘Sell’, appreciating the company’s investment interest income growth.
At the end of March 2022, 7 hedge funds owned stakes in Horizon Technology Finance Corporation (NASDAQ:HRZN), up from 6 in the previous quarter, according to Insider Monkey’s data. The collective value of stakes owned by hedge funds stood at over $6.8 million.
4. Ellington Financial Inc. (NYSE:EFC)
Dividend Yield as of July 8: 11.83%
Ellington Financial Inc. (NYSE:EFC) is a Connecticut-based investment adviser specializing in diversified credit, mortgage, and related markets.
Ellington Financial Inc. (NYSE:EFC) shifted to monthly payments in 2019, after offering quarterly dividends consistently for 7 years. Though the stock’s payout ratio stands very close to 100% in Q1 2022, its improving assets have investors hopeful about future dividend growth. At the end of March, the company had over $363.5 million available in cash or cash equivalents, up from $92.6 million in the previous quarter. Moreover, Ellington Financial Inc. (NYSE:EFC) paid over $11.6 million in dividends in Q1, compared with $10.3 million of dividends paid during Q4 2021. The company currently pays a monthly dividend of $0.15 per share.
In June, Piper Sandler presented an optimistic stance about Ellington Financial Inc. (NYSE:EFC) due to the company’s improving financials. However, the firm also acknowledged the market volatility that can put the stock at risk. Given this, the firm lowered its price target on the stock to $17 but maintained an Overweight rating on the shares.
Insider Monkey’s Q1 2022 database shows that 7 hedge funds held investments in Ellington Financial Inc. (NYSE:EFC), the same as in the previous quarter. The total value of these investments stood at $25.6 million. Jim Simons and David Harding were the most prominent shareholders of the company in Q1.
3. Broadmark Realty Capital Inc. (NYSE:BRMK)
Dividend Yield as of July 8: 12.33%
Broadmark Realty Capital Inc. (NYSE:BRMK) is a Washington-based specialty real estate investment trust that provides financing solutions to consumers.
In 2020, Broadmark Realty Capital Inc. (NYSE:BRMK) had to trim its dividend by 25% to $0.06 per share due to the global market crash. Since then, the company has raised its monthly dividend by a penny to $0.07 per share in 2021, with a yield of 12.33%, as of July 8. In Q1 2022, Broadmark Realty Capital Inc. (NYSE:BRMK) paid nearly $9.3 million in dividends to shareholders, almost in line with its previous quarter’s payments. The company’s balance sheet signals another dividend cut, as its dividend payments accounted for 140% of its income in Q1, compared with a 120% payout ratio in Q4 2021.
In June, Piper Sandler initiated its coverage of Broadmark Realty Capital Inc. (NYSE:BRMK) with a Neutral rating and a $7 price target, calling the stock a long-term opportunity due to the global supply and demand imbalance.
As per Insider Monkey’s Q1 2022 data, 7 hedge funds reported owning stakes in Broadmark Realty Capital Inc. (NYSE:BRMK), down from 11 in the previous quarter. These stakes hold a consolidated value of over $50 million. Farallon Capital was the company’s leading shareholder in Q1, owning shares worth nearly 5 million.
2. AGNC Investment Corp. (NASDAQ:AGNC)
Dividend Yield as of July 8: 12.53%
AGNC Investment Corp. (NASDAQ:AGNC) is an internally-managed real estate investment trust that invests in residential mortgage-backed securities.
AGNC Investment Corp. (NASDAQ:AGNC) trimmed its monthly payout in 2020 by 25% but the cut was comparatively smaller than other mREITs made during this period. Since then, the company has been paying a monthly dividend of $0.12 per share, with a yield of 12.53%, as of July 8.
In June, Keefe Bruyette upgraded AGNC Investment Corp. (NASDAQ:AGNC) to ‘Outperform’ while lifting the stock’s price target to $13.25. The firm expects mortgage REITs to generate positive returns in 2022.
At the end of Q1 2022, 14 hedge funds in Insider Monkey’s database owned stakes in AGNC Investment Corp. (NASDAQ:AGNC), down from 21 a quarter earlier. The collective value of these stakes is over $70.4 million. With nearly $41 million worth of shares, Canyon Capital Advisors held the largest position in the company in Q1.
1. ARMOUR Residential REIT, Inc. (NYSE:ARR)
Dividend Yield as of July 8: 16.71%
A Florida-based real estate investment trust, ARMOUR Residential REIT, Inc. (NYSE:ARR) has been making dividend payments consecutively for the past 11 years. The company does not have a stable dividend growth history and the last raise was in June 2020. ARMOUR Residential REIT, Inc. (NYSE:ARR) currently offers a monthly dividend of $0.10 per share, with a yield of 16.71%, which is well above the industry average.
In May, Barclays highlighted the declining book value of ARMOUR Residential REIT, Inc. (NYSE:ARR) and rising interest rates. In view of this, the firm lowered its price target on the stock to $6 with an Underweight rating on the shares.
At the end of Q1 2022, 4 hedge funds held nearly $6 million worth of investments in ARMOUR Residential REIT, Inc. (NYSE:ARR), as per Insider Monkey’s data. In comparison, 6 hedge funds owned stakes in the company in the previous quarter, valued at over $11.3 million.