Updated on September 1st, 2023 by Bob Ciura Spreadsheet data updated daily
Monthly dividend stocks are securities that pay a dividend every month instead of quarterly or annually.
This research report focuses on all 83 individual monthly paying securities. It includes the following resources.
Resource #1: The Monthly Dividend Stock Spreadsheet List
This list contains important metrics, including: dividend yields, payout ratios, dividend growth rates, 52-week highs and lows, betas, and more.
Note: We strive to maintain an accurate list of all monthly dividend payers. There’s no universal source we are aware of for monthly dividend stocks; we curate this list manually. If you know of any stocks that pay monthly dividends that are not on our list, please email firstname.lastname@example.org.
You can see detailed analysis on monthly dividend securities we cover by clicking the links below. We’ve included our most recent Sure Analysis Research Database report update in brackets as well, where applicable.
The list above shows that monthly paying dividend stocks tend to fall into one or more of the following categories:
The 10 Best Monthly Dividend Stocks
This research report examines the 10 monthly dividend stocks from our Sure Analysis Research Database with the highest 5-year forward expected total returns. We currently cover more than 40 monthly dividend stocks every quarter in the Sure Analysis Research Database.
Each separate monthly dividend stock has its own unique characteristics. The resources below will give you a better understanding of monthly dividend stock investing.
The following research reports will help you generate more monthly dividend stock investment ideas.
Monthly Dividend Stock Performance Through August 2023 In August 2023, a basket of the monthly dividend stocks above generated negative returns of 3.5%. For comparison, the Russell 2000 ETF (IWM) generated negative returns of 3.3% for the month.
Notes: Data for performance is from Ycharts. Canadian company performance may be in the company’s home currency.
Monthly dividend stocks underperformed the Russell 2000 in August. We will update our performance section monthly to track future monthly dividend stock returns.
In August 2023, the 3 best-performing monthly dividend stocks (including dividends) were:
First National Financial (FNLIF), up 9.8%
Peyto Exploration & Development (PEYUF), up 7.7%
SL Green Realty (SLG), up 4.8%
The 3 worst-performing monthly dividend stocks (including dividends) in August were:
With that said, monthly dividend stocks are better under all circumstances (everything else being equal), because they allow for returns to be compounded on a more frequent basis. More frequent compounding results in better total returns, particularly over long periods of time.
Consider the following performance comparison:
Over the long run, monthly compounding generates slightly higher returns over quarterly compounding. Every little bit helps.
With that said, it might not be practical to manually re-invest dividend payments on a monthly basis. It is more feasible to combine monthly dividend stocks with a dividend reinvestment plan to dollar cost average into your favorite dividend stocks.
The last benefit of monthly dividend stocks is that they allow investors to have – on average – more cash on hand to make opportunistic purchases. A monthly dividend payment is more likely to put cash in your account when you need it versus a quarterly dividend.
Case-in-point: Investors who bought a broad basket of stocks at the bottom of the 2008-2009 financial crisis are likely sitting on triple-digit total returns from those purchases today.
The Dangers of Investing In Monthly Dividend Stocks Monthly dividend stocks have characteristics that make them appealing to do-it-yourself investors looking for a steady stream of income. Typically, these are retirees and people planning for retirement.
Investors should note many monthly dividend stocks are highly speculative. On average, monthly dividend stocks tend to have elevated payout ratios. An elevated payout ratio means there’s less margin for error to continue paying the dividend if business results suffer a temporary (or permanent) decline.
As a result, we have real concerns that many monthly dividend payers will not be able to continue paying rising dividends in the event of a recession.
Additionally, a high payout ratio means that a company is retaining little money to invest for future growth. This can lead management teams to aggressively leverage their balance sheet, fueling growth with debt. High debt and a high payout ratio is perhaps the most dangerous combination around for a potential future dividend reduction.
With that said, there are a handful of high-quality monthly dividend payers around. Chief among them is Realty Income (O). Realty Income has paid increasing dividends (on an annual basis) every year since 1994.
The Realty Income example shows that there are high-quality monthly dividend payers around, but they are the exception rather than the norm. We suggest investors do ample due diligence before buying into any monthly dividend payer.
Final Thoughts & Other Income Investing Resources
Financial freedom is achieved when your passive investment income exceeds your expenses. But the sequence and timing of your passive income investment payments can matter.
Monthly payments make matching portfolio income with expenses easier. Most personal expenses recur monthly whereas most dividend stocks pay quarterly. Investing in monthly dividend stocks matches the frequency of portfolio income payments with the normal frequency of personal expenses.
Additionally, many monthly dividend payers offer investors high yields. The combination of a monthly dividend payment and a high yield should be especially appealing to income investors.
But not all monthly dividend payers offer the safety that income investors need. A monthly dividend is better than a quarterly dividend, but not if that monthly dividend is reduced soon after you invest. The high payout ratios and shorter histories of most monthly dividend securities mean they tend to have elevated risk levels.
Because of this, we advise investors to look for high-quality monthly dividend payers with reasonable payout ratios, trading at fair or better prices.
Additionally, see the resources below for more compelling investment ideas for dividend growth stocks and/or high-yield investment securities.
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