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For income investors, the only thing that’s better than a quarterly dividend payment is a monthly dividend payment. And that consistency of a regular, frequent payout makes monthly dividend stocks so appealing.
Companies that offer a monthly dividend aren’t as common as the quarterly dividend companies. While there are hundreds of dividend stocks, only a select 80 pay out on a monthly basis.
Why is that a big deal? It depends on what you’re doing with the money.
If you’re using your monthly dividend payment as income, then a monthly payout makes sense. You can budget your monthly expenses knowing that you have a regular check coming. It’s easier.
If you’re investing your dividend payout back into your account, a monthly payout also makes sense. The sooner you get a check, the sooner you can put it into equities and grow your accounts. I would much rather get a smaller dividend check each month so I can put that money to work right away, then wait for a quarterly check.
We’re using the Dividend Grader to identify the best monthly dividend stocks you can buy . With rankings determined by the stock’s payout, consistency, and payout ratio, the Dividend Grader is an ideal tool to help income investors find the best of the best.
PennantPark Floating Rate Capital (PFLT)
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PennantPark Floating Rate Capital (NYSE:PFLT) is a business development company, which is a business structure that’s ideally suited for monthly dividend stocks.
BDCs are like real estate investment trusts in that they are required to distribute 90% of their income to shareholders.
PennantPark is a Miami-based company that prioritizes investing in companies that are owned by established middle market private equity sponsors.
It currently invests in 15 companies, including marketing firms, a veterinarian, a health care provider and an insurance company.
PennantPark brought in $19.1 million in income in the first quarter, or 31 cents per share, and pays a monthly dividend yield of 10.8%.
PFLT stock gets “B” ratings in both the Portfolio Grader and the Dividend Grader.
Main Street Capital (MAIN)
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Main Street Capital (NYSE:MAIN) is purely an equity firm. It invests in lower and middle market companies, with its most recent investment being Heritage Vet Partners, which it invested $25.9 million to help it acquire a Texas mixed animal practice.
Main Street currently has dozens of investments and has supported over 200 companies throughout the course of its business.
The first quarter saw net investment income of $89.8 million and $1.05 per share, up from $80.9 million and $1.02 per share.
MAIN stock provides a monthly dividend yield of 5.8%. It gets an “A” rating in the Portfolio Grader and a “B” rating in the Dividend Grader.
Gladstone Investment Corp. (GAIN)
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Gladstone Investment Corp. (NASDAQ:GAIN) is another business development company. It has a specialized strategy of investing in mature lower middle market companies that have earnings before interest, taxes, depreciation, and amortization between $4 million and $15 million.
That focused strategy has Gladstone investing in 24 companies currently, including business and consumer services firms, consumer product companies and manufacturers.
The company saw total income of $23.6 million in the fourth quarter of fiscal 2024, up 2.5% from a year ago. Net income dropped from $9.7 million and 28 cents per share a year ago to $5.3 million and 15 cents per share, with management attributing the difference to an increase in total expenses, net of credits.
However, GAIN still pays a solid dividend yield of 6.7%. It gets “B” ratings in the Portfolio Grader and the Dividend Grader.
Cross Timbers Royalty Trust (CRT)
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That brings us to another type of investment that is a popular avenue for monthly dividend stocks. Royalty trusts own the rights to specific assets, like mineral rights or natural gas reserves.
It collects royalties from the companies that are mining those reserves, and then distributes them as monthly dividends that are usually very attractive.
Cross Timbers Royalty Trust(NYSE:CRT) was formed in 1991 to convey royalties from XTO Energy’s ownership of gas properties in the San Juan Basin of New Mexico and oil interests in Texas and Oklahoma.
In 2023, Cross Timbers reported profits of $12.3 million, down slightly from 2022. It paid a monthly average dividend of 15.3 cents per share, up from 15.2 cents a year ago.
CRT offers a dividend yield of 10.4% — but keep in mind that as a royalty trust, CRT is a pass-through entity, and shareholders pay federal income taxes on the disbursem*nts.
CRT gets a “C” rating in the Portfolio Grader and a “B” rating in the Dividend Grader.
Gladstone Land Company (GLAD)
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Gladstone Land Company (NYSE:GLAD) is another BDC, but this specializes in farmland. It has operations on the West Coast, in the southeast U.S. and in Texas, New Jersey, Maryland, Michigan, Arizona, Nebraska and Colorado.
Gladstone is actively working to increase its holdings, offering to purchase farms and rent them back to farmers, or to buy properties with farming tenants already in place.
Net income in the first quarter was $7.4 million and 21 cents per share, up from $5.9 million and 17 cents per share in the same quarter a year ago.
Gladstone also increased its distributions to shareholders for the 34th time in 37 quarters, giving investors some security that those dollars will continue to roll in.
GLAD stock provides a dividend yield of 8.9% and gets “B” ratings in the Portfolio Grader and the Dividend Grader.
U.S. Global Investors (GROW)
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While it’s fun to manage your own investments, there are plenty of companies that will do the job for you. And at least one of them is a good monthly dividend stock.
U.S. Global Investors (NASDAQ:GROW) is an investment management company that manages eight no-load mutual funds that focus on emerging markets, precious metals, bonds and domestic funds.
It also has two exchange-traded funds that invest in the airline industry and precious metal miners.
Revenue in what was acknowledged as a challenging first quarter was $2.59 million, down from $3.64 million a year ago. Management noted that borrowing costs continue to be high as the Federal Reserve keeps interest rates higher, but the company also repurchased 211,000 shares to provide additional value to shareholders.
GROW stock has a dividend yield of 3.4%, and gets a “C” rating in the Portfolio Grader and a “B” rating in the Dividend Grader.
Permianville Royalty Trust (PVL)
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Permianville Royalty Trust (NYSE:PVL) is another royalty trust on our list. The company has the right to 80% of profits from the sale of oil and natural gas production from locations in Texas, Louisiana and New Mexico. It also has some assets in the Permian and Haynesville basins.
In April, the company saw sales volumes of 100,185 barrels of oil and 354,556 cubic feet of natural gas. While both of those were significant increases from March, Permianville isn’t paying a distribution in May because elevated capital expenses resulted in a deficit of $1.9 million.
Payouts will resume when the deficit, which is now roughly $4.5 million, is cleared.
But when that payout resumes, it will be significant. PVL provides a monthly dividend yield typically of 22.2%. And it gets a “C” rating in the Portfolio Grader and an “A” rating in the Dividend Grader.
On the date of publication, neither LouisNavellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
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