<script async src="https://pagead2.googlesyndication.com/pagead/js/adsbygoogle.js?client=ca-pub-7812625775618425"
crossorigin="anonymous"></script>
<ins class="adsbygoogle"
style="display:block; text-align:center;"
data-ad-layout="in-article"
data-ad-format="fluid"
data-ad-client="ca-pub-7812625775618425"
data-ad-slot="7612548205"></ins>
<script>
(adsbygoogle = window.adsbygoogle || []).push({});
</script>
Dividends are a great source of passive income. The only effort you have to put in is to research quality stocks with high yields to achieve another source of income. Dividends are usually paid every quarter, but a select few choose to pay monthly and you'll find the best ones available in this article.
Why monthly dividends are better?
In short, you get paid more often. It's much better to get paid from beginning to end than to just get paid in the beginning. Would you like $12,000 1 year later or $1,000 a month until year-end? You get the same amount of money, but not the same purchasing power due to inflation and equity prices changing.
You can use your monthly dividends to reinvest back into dividend stocks to increase your income or invest it elsewhere. It's up to you what you want to do with the money as the payments enter into your account as cash not equity. You can withdraw it and put it into your bank. This is what makes dividends great, you get paid for holding an investment and doing nothing! Here are the top 7 monthly dividend stocks with high yields.
1) Horizon Technology Finance Corp (HRZN)
Price - $15.66
Market Cap - 319.88 Million
P/E Ratio - 11.13
Dividend Yield - 7.66%
Horizon is a main mission lending platform that gives based debt merchandise to existence sciences and era companies.
Horizon has been having great earnings showing growth and support as stock as it passes 2010 IPO prices and currently sitting below all-time highs. Usually, stocks with high dividends aren't able to hold onto their price, but Horizon has been able to recover and is a great opportunity to earn a high yield monthly.
Income Statement 2020
Revenue | $46.04 Million (6.75% Revenue Growth YoY) |
Gross Profit | $34.39 Million |
Operating Income | $30.64 Million |
Net Income | $6.36 Million |
Horizon Technology is a good long-term investment. Although it is a small-cap stock, it operates with high profit. They were still able to accomplish a profit even though they had quarters with losses. With 2021 earnings they are reporting record profits and will continue to keep that trend for the long term.
2) Pennantpark Floating Rate Capital Ltd (PFLT)
Price - $13.01
Market Cap - 506.60 Million
P/E Ratio - 8.93
Dividend Yield - 8.76%
Pennantpark primarily provides first-lien debt. First lien debt holders are paid back before all debt holders making it less risky for them to loan out money. They also invest in middle-market companies with proven management teams, competitive market positions, strong cash flow, growth potential, and viable exit strategies.
If you would like a stagnant stock and just collect dividends then this would be the best option. From 2011 till today, the stock has returned a total of -3%. With a dividend of 8.76%, it is well worth the stable price.
100k invested in PFLT in 2011:
Equity - 97k (3k unrealized loss)
Dividend Received - 86.76k (realized dividend gains)
You have made almost all your money back just from holding the stock.
Income Statement 2021
Revenue | $82.69 million (-13.40% growth YoY) |
Gross Profit | $66.68 million |
Operating Income | $64.58 million |
Net Income | $56.52 million (206.93% growth) |
PFLT's stable history shows that it's a good dividend stock. They strived for profit in 2021 and did so easily posting record profits. PFLT should continue having a stable future and provide a great source of income.
3) Stellus Capital Investment Corp (SCM)
Price - $13.73
Market Cap - 267.54 Million
P/E Ratio 6.67
Dividend Yield - 8.15%
Stellus Capital Investment Corporation is an externally managed, undiversified self-contained investment company.
Company Statistics
20+ Years Average Experience
$2.1 Billion of Assets Under Management (AUM)
75 Current Active Investments
290+ Cumulative Completed Investments
$7.1+ Billion in Invested Capital
SCM reached lows in 2016 and 2020 and was able to successfully recover from both crashes. Since its IPO in 2012, the stock is down 9.49%, but with an 8.15% dividend, it has long paid its share of equity loss.
Income Statement 2020
Revenue | $56.66 Million (-3.83% YoY Growth) |
Gross Profit | $43.41 Million |
Operating Income | $38.71 Million |
Net Income | $20.19 Million |
SCM has been on an uptrend and continues to hold that trend making a good buy with a high yield.
4) Main Street Capital Corporation (MAIN)
Price - $44.07
Market Cap - 3.07 Billion
P/E Ratio 9.54
Dividend Yield - 5.85%
Main Street Capital Corporation is an investment firm that provides long-term debt and equity capital to lower middle-market companies and debt capital to middle-market companies.
Unlike the stocks mentioned before MAIN has been able to appreciate fairly well. Since its IPO in 2007, the stock has appreciated 193.80% while holding a low P/E ratio and strong dividend.
Income Statement 2020
Revenue | 222.61 Million (-8.53% Revenue Growth YoY) |
Gross Profit | 222.61 Million |
Operating Income | 187.53 Million |
Net Income | 29.38 Million |
Profit took a big hit in 2020, but that was normal considering complications with the pandemic surge. This has been the opposite for 2021 as profits have skyrocketed. In fact, profits have matched or exceeded revenue in each of the quarters. A great company and great dividend are rare to find, which makes MAIN a spectacular long-term stock.
5) Gladstone Capital Corporation (GLAD)
Price - $11.09
Market Cap - $380.44 Million
P/E Ratio - 4.37
Dividend Yield - 7.03%
Gladstone Capital Corporation partners with management teams, entrepreneurs, and private equity funders to provide financial solutions to lower-mid market businesses across the country.
GLAD peaked before the 2008 crash and has been at stagnant levels since then. However, revenue and profit have been rising while remaining undervalued at only a 4.37 P/E Ratio making it a very attractive buy.
Income Statement 2021
Revenue | $53.79 Million (12.17% Revenue Growth YoY) |
Gross Profit | $42.33 Million |
Operating Income | $38.98 Million |
Net Income | $84.3 Million |
GLAD is a good value play with a low market cap and high net income. This stock is not volatile so expect it to slowly go up or stay stagnant while enjoying a nice 7% return yearly.
6) Ellington Financial Inc - (EFC)
Price - $17.70
Market Cap - $1.02 Billion
P/E Ratio - 5.18
Dividend Yield - 10.17%
Ellington Financial invests in a wide range of financial assets, including residential and commercial mortgage-backed securities, residential and commercial mortgages, consumer loans, and property-backed securities. by consumers, secured loan obligations, unsecured and mortgage-related derivatives, equity investments in established lending companies and strategic investments other.
The highest dividend is offered by any stock mentioned on the list and has a good track record with a low P/E ratio making it a great stock to earn income.
Income Statement 2020
Revenue | $46.66 Million (-49.97% Revenue Growth YoY) |
Gross Profit | $35.15 Million |
Operating Income | $1.82 Million |
Net Income | $25.01 Million |
After a devastating 2020, EFC was able to recover fairly well to return back to pre-pandemic levels. 10.17% is no normal dividend rate, the market on average returns 10% yearly, now imagine taking that 10% as income every year paid monthly. EFC is a good value dividend stock.
7) Realty Income Corp (O)
Price - $69.13
Market Cap - $39.11 Billion
P/E Ratio - 54.65
Dividend Yield - 4.28%
Realty Income Corporation is a real estate investment trust that invests in freestanding, single-tenant commercial properties in the United States, Spain, and the United Kingdom that are subject to NNN Leases.
This company is different than the other ones as it operates in the real estate industry. Realty Income has been public since 1994 pricing in at $8. This stock has been through it all and has a strong reputation and is able to handle market downfalls smoothly and come back stronger. It also pays a nice dividend considering that it's a growing large-cap business.
Income Summary 2020
Revenue | $1.651 Billion |
Gross Profit | $1.547 Billion |
Operating Income | $725.77 Million |
Net Income | $395.49 Million |
Realty Income is one of the best REITs and offering monthly dividends makes the stock a great addition to your portfolio.
7 Best Monthly Dividend Stocks With High Yields
Horizon Technology Finance Corp (HRZN)
Pennantpark Floating Rate Capital Ltd (PFLT)
Stellus Capital Investment Corp (SCM)
Main Street Capital Corporation (MAIN)
Gladstone Capital Corporation (GLAD)
Ellington Financial Inc (EFC)
Realty Income Corp (O)
These stocks offer great monthly dividends to add to your portfolio to gain an additional source of income. You can choose to reinvest the gains and earn more in dividends or do anything you would like. It's your money!
When choosing a dividend stock don't just look at the dividend yield. There are many high-yield stocks that are not good companies resulting in the total downfall of the company. Make sure to research companies with a great history and offer dividends in the past. Keep in mind, that there are a lot of dividend stocks. Top companies provide dividends, but at a much less yield and are paid every quarter.
The main focus of this article wasn't investing for appreciation purposes but buying these dividend stocks to achieve monthly income. Who wouldn't want to earn money while doing nothing? You are earning money while you sleep! Research these 7 stocks provided if you would like to earn monthly dividends