These Top-3 High-Yield Stocks Pay Out Dividends Every Month
For investors who are seeking frequent payouts, these three high-dividend names could be the right fit.
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Most stocks that pay dividends do so on a quarterly basis. Some companies pay dividends on a semi-annual or annual schedule. But for investors looking for more frequent payouts, monthly dividend stocks may be appealing.
Even better, some monthly dividend stocks have high dividend yields above 8%. This article will analyze three high-yield monthly dividend stocks in greater detail.
1. EPR Properties (EPR)
EPR Properties EPR is a specialty real estate investment trust, or REIT, that invests in properties in specific market segments that require industry knowledge to operate effectively. It selects properties it believes have strong return potential in entertainment, recreation and education.
The REIT structures its investments as triple-net, a structure that places the operating costs of the property on the tenants, not the REIT. The portfolio includes about $7 billion in investments across 300-plus locations in 44 states, including over 250 tenants. Total revenue should be in excess of $630 million this year.
EPR posted third quarter earnings on October 30, 2024, and results were better than expected on both the top and bottom lines. Funds from operations (FFO) came to $1.29, which was two cents ahead of estimates. FFO was down from $1.47 per share a year ago. On a dollar basis, FFO fell from $113 million to just over $100 million. Revenue was off almost 5% year over year to $180.5 million, which was $21.5 million ahead of expectations.
EPR narrowed its guidance for the year to a range of $4.80 to $4.92 in adjusted FFO per share for the year, which is a narrowing of four cents on each side of guidance. The company is also expecting investment spending in the range of $225 million to $275 million, which was $200 million to $300 million prior.
EPR’s competitive advantage is its portfolio of specialized properties. EPR has methodically identified the most profitable properties through years of experience and focuses its investments in these areas. It certainly isn’t immune to recessions, but it remained profitable during the worst of the financial crisis and continued to pay its dividend.
Recent results indicate that the worst is behind EPR, and the recent restructuring is a big step forward. We’re moving our growth estimate to 2% as we think EPR’s current level of earnings is sustainable, but tough to grow meaningfully from for the timebeing. The dividend is at a rate of $3.42 per share annually, which currently yields 7.6%.
2. LTC Properties (LTC)
LTC Properties LTC is a REIT 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 189 investments in 25 states with 29 operating partners.
As a healthcare REIT, 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 boomers’ generation and the steady rise of life expectancy thanks to sustained progress in medical sciences.
LTC has been facing a headwind in recent years, namely the bankruptcy of Senior Care Centers, which is the largest skilled nursing operator in Texas. Senior Care filed for Chapter 11 bankruptcy in December 2018. Until 2018, it was generating 9.7% of the annual revenues of LTC and was the fifth-largest customer of LTC.
In late October, LTC reported financial results for the third quarter of fiscal 2024. FFO per share grew 5% over the prior year’s quarter, from $0.65 to $0.68, but missed the analysts’ consensus by $0.01.
The increase in FFO per share resulted primarily from higher income from previously transitioned properties and higher income from loan originations. LTC drastically improved its leverage ratio (net debt to EBITDA) from 5.3x to 4.2x thanks to various asset sales.
Growth has stalled in the last seven years, partly due to the bankruptcy of Senior Care. On the positive side, the REIT has most of its assets in states with the highest projected increases in the 80-plus population cohort over the next decade.
LTC stock currently yields 5.9%.
3. Apple Hospitality REIT (APLE)
Apple Hospitality REIT APLE is a hotel REIT that owns a portfolio of hotels with tens of thousands of rooms located across dozens of states.
It franchises its properties out to leading brands, including Marriott-branded hotels, Hilton-branded hotels and Hyatt-branded hotels.
As of December 31, 2023, Apple Hospitality owned 225 hotels with a total of 29,900 guest rooms across 88 markets in 38 states.
APLE posted second-quarter earnings per share (EPS) of $0.31, beating estimates by $0.01, and generated revenue of $390.08 million, representing a 7.87% year-over-year increase which surpassed expectations by $2.57 million.
For the second quarter, Apple Hospitality recorded net income of $73.9 million, an increase of 13.2% compared to the same period in 2023, with a net income per share of $0.31, up 6.9%.
The company's operating income for Q2 was $93.5 million, up 12.6%, and the operating margin improved by 100 basis points to 24%. Adjusted EBITDA rose by 9.1% to $140.9 million, while modified funds from operations (MFFO) increased 8.9% to $121.3 million.
Comparable hotel performance remained strong, with average daily rate (ADR) at $163.01, a 0.3% increase year over year, and occupancy rising by 2.2% to 79.8%.
Apple's portfolio concentration in strong brand names, excellent locations, strong balance sheet, franchising model and emphasis on value should enable it to outperform its peers in a recession.
It has some of the lowest debt-to-equity in the sector and plenty of liquidity along with a well-laddered debt maturity profile. APLE stock currently yields 6.3%.
At the time of publication, Ciura had no positions in any securities mentioned.