3 Under-the-Radar Monthly Dividend Stocks for Income Investors
Those desiring more frequent payouts should consider these names, unknown to most investors, that pay a dividend each month.
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With most stocks distributing dividends quarterly, investors needing predictable monthly cash flow could desire more frequent payouts.
This is where monthly dividend stocks come in. Monthly dividend stocks pay shareholders a dividend each month, for 12 total payments per year.
Investors can even find high yields above 5% from monthly dividend stocks. This article will discuss three of the high-yielding monthly dividend stocks that are flying under the radar of most income investors.
Modiv Industrial
Modiv Industrial MDV acquires, owns, and actively manages single-tenant net-lease industrial, retail, and office properties in the United States, focusing on strategically essential and mission-critical properties with predominantly investment-grade tenants. As of its most recent filings, the company’s portfolio comprised 44 properties that occupied 4.6 million square feet of aggregate leasable area.
On August 6, Modiv reported its Q2 results for the period ending June 30, 2024. For the quarter, rental income came in at $11.3 million, down 4.2% year over year. This was mainly due to the elimination of some non-NNN tenant reimbursements related to the August 2023 portfolio disposition of 13 properties. Management fee income was stable at nearly $66 million.
As a result, total income reached nearly $11.4 million, down 4.2% from $11.9 million last year. Adjusted funds from operations (AFFO) was $3.9 million, or $0.34 per diluted share, versus AFFO of $3.3 million, or $0.31 per diluted share, in the prior-year period. For 2024, we expect AFFO per share to be close to $1.56 based on the company’s current leasing profile.
Management has been primarily focused on acquiring industrial properties, but they’ve stated they may also target other types, including retail properties, data centers, and storage properties. For instance, in 2022, the company acquired four industrial properties and one retail property. Modiv’s strategy is to keep on acquiring more properties, which it hopes will be accretive to AFFO per share over time.
MDV has a few competitive advantages. Some notable qualities include a lengthy weighted average lease term of 14.0 years, which should provide predictable cash flow. Modiv has a quality tenant base as well, including Costco COST, 3M MMM, and Northrop Grumman NOC.
MDV pays a monthly dividend, which currently yields 7.1%.
Gladstone Land
Gladstone Land Corp. LAND is a real estate investment trust, or REIT, that specializes in the owning and operating of farmland in the U.S. The trust owns about 160 farms, comprising more than 110,000 acres of farmable land. Gladstone’s business is made up of three different options available to farmers, all of which are done on a triple-net basis.
It offers long-term sale leaseback transactions, traditional leases of farmland, and outright purchases of farm properties. Gladstone’s portfolio has an appraised value of over $1.5 billion, and the stock trades with a market capitalization of $486 million.
Gladstone posted second-quarter earnings on August 8, and results were better than expected on both the top and bottom lines. Funds from operations came to 14 cents, which was two cents ahead of estimates. It was also up from 13 cents a year ago. Revenue was $21.3 million, up fractionally year over year, and beat estimates by $1.26 million. Operating expenses were $13.4 million, up from $13 million in Q1, and flat to a year ago.
Net asset value ended the quarter at $17.59 per share, down from $18.50 in Q1. The decline was due primarily to valuation declines in certain farms that were reappraised, somewhat offset by an increase in in the value of the trust’s fixed, long-term borrowings and certain preferred stocks. Gladstone boosted its dividend for the 10th consecutive year,
We see future FFO-per-share growth at 3.5% annually going forward. Acquisitions and rent escalations are likely to be the only sources of AFFO growth in the coming years, as has been the case for some time. Growth in the trust’s portfolio will drive higher rental revenues.
Gladstone offers farmers a diverse portfolio of high-quality properties. Recessions may hurt the trust’s earnings as farmers that operate on low margins may struggle if a downturn occurs. The dividend should be sustainable at 92% of AFFO per share for this year.
LAND stock currently yields 4.1%.
Fortitude Gold
Fortitude Gold Corp. FTCO was spun off from Gold Resource Corp. GORO into a separate public company in December 2021. Fortitude Gold is a junior gold producer with operations in Nevada, one of the world’s premier mining friendly jurisdictions.
The company targets high-grade gold open pit heap leach operations averaging one gram per tonne of gold or greater. Its property portfolio currently consists of 100% ownership in six high-grade gold properties.
All six properties are within an approximate 30-mile radius of one another within the prolific Walker Lane Mineral Belt. The company generated $73.1 million in revenues last year, almost the majority of which were from gold, and is based in Colorado Springs, Colorado. It pays dividends on a monthly basis. The shares are trading over the counter (OTC) and are not listed on a major exchange.
On July 30, Fortitude Gold posted its Q2 results for the period ending June 30, 2024. For the quarter, revenues came in at $9.6 million, 50.3% lower compared to last year. The decline in revenues was driven by a 58% drop in ounces of gold sold. However, a 19% increase in ounces of silver sold along with 18% higher gold and 19% higher silver prices slightly offset this setback.
Moving to the bottom line, the company recorded a mine gross profit of $4.8 million compared to $11.2 million last year due to lower net sales.
As Fortitude Gold generates essentially all of its revenue from gold, it is obviously highly sensitive to the cycles of the price of gold. Rising inflation has caused the price of gold to rally to an all-time high in the last year, with gold now over $2,600 per ounce. This is an ideal development for a pure gold producer, such as Fortitude Gold.
FTCO stock is a high-risk, high-reward situation. On one hand, rising gold prices and improved operating processes can significantly enhance the company’s financial performance amid higher profit margins. On the other hand, declining gold prices and rising expenses, could negatively affect profitability.
We consider Fortitude Gold’s payouts speculative. They could easily be cut assuming an extended, bad environment for the commodity. The company’s competitive advantage lies in management’s expertise and robust shareholder value creation track record. Additionally, the balance sheet is strong, with $125.5 million in total assets against just $10.5 million in total liabilities, resulting in a strong equity value of almost $115 million.
FTCO stock currently yields 9.2%.
At the time of publication, Ciura had no positions in any stocks mentioned.