Stocks That Pay Dividends Every Month
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Which Stocks Pay Dividends Every Month?

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Dividends are the part of a company’s net profits that it shares with its shareholders as a reward. Dividend investing is a very common strategy of investing among those wanting regular income from their investments.

Stocks paying dividends every month

Usually, companies in the U.S. announce dividends on a quarterly basis. However, there are also stocks that offer dividends on a monthly basis. Some investors find this form of payout more attractive, as it means a smoother income stream. Moreover, over the long term, monthly payouts help compound returns.

The most common stocks paying monthly dividends

Most of the stocks that pay monthly dividends are REITs. Their dividends usually form a significant part of their returns, because they're required to distribute 90 percent of their taxable income to shareholders. They earn a relatively stable stream of revenue from rents paid by their tenants, enabling them to distribute payouts consistently. Business development companies (or BDCs) are another set of stocks that issue monthly dividends.

Stocks paying monthly dividends with yields over 10 percent

MarketBeat lists stocks that pay monthly dividends. The following are the stocks with a dividend yield of over 10 percent:

  • MFS Special Value Trust, 10.15 percent
  • Dynex Capital, 10.33 percent
  • Gladstone Capital, 10.39 percent
  • AGNC Investment, 10.57 percent
  • Chick Soup Preferred A, 10.59 percent
  • MTBC, 10.78 percent
  • American Finance Trust, 11.35 percent
  • Gamco Natural Resources Gold & Incm Trust, 11.39 percent
  • Highland FR OPP, 11.43 percent
  • Tortoise Essent, 11.72 percent
  • Eaton Vance Tax-Managed Global Dive Eq, 11.88 percent
  • Eaton Vance Tax-Managed Global Buy-Write, 12.23 percent
  • Stellus Capital Investment, 12.56 percent
  • Armour Residential REIT, 12.74 percent
  • BlackRock Global Energy & Resources Trust, 12.95 percent
  • Sabine Royalty Trust,12.97 percent
  • 1ST TR Energy, 12.97 percent
  • Barings Global Short Duration High Yield Fund, 13.56 percent
  • First Trust Dynamic Europe Equity Income Fund, 13.73 percent
  • Pennantpark Floating Rate Capital, 13.82 percent
  • DE Enhanced GLB, 13.82 percent
  • Brookefield RL A, 13.92 percent
  • CTR Coast MLP, 14.33 percent
  • Prospect Capital, 14.34 percent
  • Orchid Island Capital, 14.49 percent
  • Voya International High Div Eqt Incm Fd, 14.66 percent
  • XAI Octagon FR, 14.67 percent
  • Rivernorth Do, 15.22 percent
  • Oxford Square Capital, 17.42 percent
  • Tortoise Power & Energy Infrastructure Fund, 21.55 percent
  • Oxford Lane Capital, 22.27 percent
  • Miller Howard, 22.60 percent
  • Great Elm Capital, 24.49 percent
  • Stone Harbor Emerging Mkt Total Incm FD, 25.00 percent
  • Eagle Point CR, 29.55 percent
  • X-Links Crude Oil Shares Covered Call ETN, 30.73 percent
  • Stone Harbor Emerging Markets Income Fund, 44.44 percent

What to keep in mind when investing in monthly dividend stocks

While monthly dividend stocks and their potential predictable stream of cash flow may seem enticing, you should be careful when selecting stocks. Practicing due diligence and checking their payment history, leverage ratios, and profitability metrics is of utmost importance. 

Apart from REITs and BDCs, companies paying high dividends monthly could be a cause for concern among shareholders. Companies usually retain a large part of their earnings to put back into the business for further growth. This move creates more business opportunities and boosts the company's stock price, rewarding shareholders. Low retention of profits could mean that the business doesn’t have any exciting opportunities to pursue. Meanwhile, some companies have suspended dividends to conserve cash to weather the coronavirus pandemic. Read more about these companies here.

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