Monthly dividend stocks are attractive for income investors who are looking for more frequent income payouts. Most stocks that pay dividends do so on a quarterly or semi-annual schedule.
But monthly dividend stocks pay shareholders each month, for 12 payments per year.
The 3 monthly dividend stocks in this article have high yields, and pay shareholders a dividend each month. This could make them more attractive for investors seeking higher levels of income.
EPR Properties (NYSE:EPR)
EPR Properties is a relatively unfollowed monthly dividend stock that invests in properties in specific market segments that require industry knowledge to operate effectively. It selects properties it believes have strong return potential in Entertainment, Recreation, and Education.
The REIT structures its investments as triple net, a structure that places the operating costs of the property on the tenants, not the REIT. The portfolio includes about $7 billion in investments across 300+ locations in 44 states, including over 250 tenants.
EPR posted third quarter earnings on October 30th, 2024, and results were better than expected on both the top and bottom lines. Funds-from-operations came to $1.29, which was two cents ahead of estimates. FFO was down from $1.47 per share a year ago. On a dollar basis, FFO fell from $113 million to just over $100 million. Revenue was off almost 5% year-over-year to $180.5 million, which was $21.5 million ahead of expectations.
EPR narrowed its guidance for the year to a range of $4.80 to $4.92 in adjusted FFO-per-share for the year, which is a narrowing of four cents on each side of guidance. The company is also expecting investment spending in the range of $225 million to $275 million, which was $200 million to $300 million prior. Disposition proceeds are expected to be $70 million to $100 million, up from $60 million to $75 million.
EPR’s competitive advantage is its portfolio of specialized properties. EPR has methodically identified the most profitable properties through years of experience and focuses its investments in these areas.
EPR stock currently yields 7.5%.
Realty Income (NYSE:O)
Realty Income is a retail real estate focused REIT that has become famous for its successful dividend growth history and monthly dividend payments.
Today, the trust owns thousands of properties. Realty Income owns retail properties that are not part of a wider retail development (such as a mall), but instead are standalone properties. This means that the properties are viable for many different tenants, including government services, healthcare services, and entertainment.
The company reported third-quarter 2024 earnings, with EPS at $0.30, missing estimates by $0.06, but revenue of $1.27 billion, a 26% year-over-year increase, beat expectations by $10.01 million. Net income for common shareholders was $261.8 million.
The company generated $915.6 million in Adjusted Funds from Operations (AFFO), or $1.05 per share. Realty Income invested $740.1 million in new properties, achieving an initial average cash yield of 7.4%, while maintaining a portfolio occupancy of 98.7%.
The growth that this REIT is experiencing has been very steady, coming almost every year at a mid-single digits CAGR. As a result, the REIT has been able to grow its AFFO per share and its dividend per share for many years and is today a Dividend Aristocrat.
Realty Income generates its growth through growing rents at existing locations, via contracted rent increases or by leasing properties to new tenants at higher rates, but also by acquiring new properties. Realty Income expects to increase its investments in international markets moving forward. It made a first deal in the UK in 2019 and plans to do more such deals in the future when it finds attractive targets. These acquisitions will help drive profits in the long run.
In addition, Realty Income’s properties are relatively Amazon-proof, as the REIT owns standalone properties that can be used as cinemas, fitness centers, pharmacies, dollar stores, etc. Realty Income’s properties are in demand and will likely remain so.
Realty Income has increased its dividend for 27 consecutive years, and is a Dividend Aristocrat. Realty Income is a high dividend REIT currently yielding 6%.
Main Street Capital (NYSE:MAIN)
Main Street Capital Corporation is a Business Development Company (BDC) that provides long-term debt and equity capital to lower middle market companies and debt capital to middle market companies.
Main Street defines lower middle market companies as generally having annual revenues between $10 million and $150 million. The company’s investments typically support management buyouts, recapitalizations, growth financings, refinancing, and acquisitions.
At the end of Q3 2024, Main Street had an interest in 84 lower middle market companies (valued at $2.5 billion), 17 middle market companies ($178 million) and 92 private loan investments ($1.9 billion).
On November 7th, 2024, Main Street Capital reported third quarter 2024 results. Net investment income of $87.6 million for the quarter was a 7% increase compared to $82.2 million in Q3 2023. The corporation generated net investment income per share of $1.00, up 1% year-over-year from $0.99 per share.
Distributable net investment income per share totaled $1.06, up 2% from $1.04 in Q3 2023. Main Street’s net asset value per share increased 4.7% since December 31st, 2023, from $29.20 to $30.57.
The corporation declared monthly dividends of $0.25 to be paid in the first quarter of 2024, which are 4.2% higher than those declared a year ago, as well as a supplemental $0.30 dividend to be paid in December. The supplemental dividends have been a result of generating realized gains from Main Street’s equity investments.
Main Street’s competitive advantage lies in its portfolio of small company interests, allowing for equity and debt exposure that would be difficult to replicate, along with the company’s management. In the last decade, the company has performed well, acting like a fund for small companies and passing along the income and gains to investors.
MAIN stock currently yields 5.1%.
Disclosure: No positions in any stocks mentioned