These 3 High-Yielding Dividend Stocks Pay Every Month

With most dividend companies distributing payouts quarterly, investors needing predictable monthly cash flow could desire more frequent distributions.

The good news is that there are a number of companies that pay dividends on a monthly basis, helping to deliver a steady stream of income. Here we discuss three of the higher-yielding monthly dividend stocks right now.

Benefiting From a Major Structural Trend

LTC Properties LTC is a real estate investment trust that invests in senior housing and skilled nursing properties. Its portfolio consists of approximately 50% senior housing and 50% skilled nursing properties. The REIT owns 194 investments in 26 states with 32 operating partners and has a market capitalization of $1.5 billion.

In late April, LTC reported financial results for the first quarter of 2024. Funds from operations (FFO) per share grew 4.5% over the prior year’s quarter, from $0.66 to $0.69, and exceeded analysts’ consensus expectations by $0.05. The increase in FFO per share resulted from higher rental revenue and higher interest income from mortgage loans, which more than offset increased interest expense amid 16-year high interest rates. LTC maintained its leverage ratio (Net Debt to EBITDA) at 5.5x.

Going forward, LTC’s growth is likely to benefit from a major structural trend. Just like other healthcare REITs, LTC benefits from a strong secular trend, namely the high growth of the population that is above 80 years old. This growth results from the aging of the baby-boomer generation and the steady rise of life expectancy thanks to sustained progress in medical sciences.

To that end, LTC has most of its assets in states with the highest projected increases in the 80+ population cohort over the next decade. LTC was hurt by the pandemic, but that crisis has subsided. Due to the low comparison base formed this year, we expect 3.0% growth in FFO per share over the next five years.

LTC currently offers an attractive dividend yield of 6.8%. However, it has frozen its dividend in the last seven years due to the absence of underlying growth. Consequently, it is prudent not to expect dividend growth for the foreseeable future. 

The payout ratio is 86% and the balance sheet is leveraged, but it has an interest coverage ratio of 2.8. Fortunately, the REIT does not have material debt maturities for the next four years.

'Glad' for Monthly Dividends

Gladstone Investment Corp. GAIN is a business development company (BDC) that focuses on U.S.-based small- and medium-sized companies. Industries which Gladstone Investment targets include aerospace & defense, oil & gas, machinery, electronics, and media & communications.

The company lends money to small- and mid-sized companies. Position sizes for debt investments usually range from $5 million to $30 million. The company also takes equity stakes in such companies, with position sizes for equity investments typically ranging from $10 million to $40 million. The companies Gladstone does business with usually cannot access debt or equity markets directly, as bond sales and public listings are not possible for them due to their small size.

Gladstone Investment reported its third quarter (Q3 2023 ended December 31) earnings results on February 6. The company generated total investment income — Gladstone Investment’s revenue equivalent — of $23.1 million during the quarter, which represents an increase of 7% compared to the prior quarter.

Gladstone Investment’s adjusted net investment income per share totaled $0.26 during the fiscal third quarter. That was up 8% from the previous quarter’s level. Gladstone Investment‘s net asset value per share totaled $13.01 on a per-share basis at the end of the quarter.

Following a NIIPS decline in fiscal 2020, Gladstone Investment has seen its NIIPS recover meaningfully and hit new record highs in fiscal 2021 and fiscal 2022.

Over the last five years profits grew by 4.3% annually, which is not a very high growth rate, but which is also not at all disappointing for a high-yielding investment.

Gladstone makes its money via spreads between the interest rates the company pays on cash that it borrows, and the interest rates it receives on cash that it lends — the same principle as with banks.

Interest rates can result in some up and downswings in the company’s net investment income, but Gladstone Investment’s weighted average interest yield has been very strong in the past on average, with a weighted average interest rate of well above 10%. 

GAIN stock currently yields 6.7%.

Get Modiv-ated

Modiv Industrial MDV is a REIT that aims to pay monthly dividends (hence the name Modiv) to its shareholders. The company 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. Prior to its public listing in 2022, the company Modiv was one of the largest non-listed REITs to raise funds entirely via crowdfunding and the first real estate crowdfunding platform to be entirely investor-owned. The company generated $46.9 million in revenues last year and is based in Costa Mesa, California.

On March 4, Modiv reported its Q4 and full-year results for the period ending December 31, 2023. For the quarter, total revenues came in at $12.3 million, up 23% year over year, excluding the 2022 lease termination fee. Adjusted funds from operations (AFFO) was $4.5 million, or $0.40 per diluted share, versus AFFO of $6.9 million, or $0.68 per diluted share, in the prior year period.

For the year, AFFO declined to $1.94 from $2.22 in 2022. The decline in AFFO for both periods was due to higher interest expenses as a result of rising interest rates. For context, in Q4, interest expenses skyrocketed by 149% to $7.05 million. For 2024, we expect AFFO per share to be close to $1.55 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 stock currently yields 7.3%.

At the time of publication,  positions in any stocks mentioned