Are These Monthly Dividend Stocks Worth Buying In October 2021?
There are many high-quality dividend stocks in the stock market today, but typically they only pay on a quarterly basis. What’s better than a high dividend every quarter, you ask? Getting paid every month, of course. We have bills to pay, and most of those bills come on a monthly basis. That makes monthly dividend stocks ideal for investors who rely on their portfolios for income. This way, investors could offset their expenses with dividend income too.
Finding companies that offer high monthly dividends is no easy task. The great news is that many of them are real estate investment trusts (REITs) and closed-end funds (CEFs). Generating consistent yield during this difficult investment climate in the stock market has continued to be the focus for many investors. These stocks are not only good for income investors on the side, but are also valuable investments for those looking to get themselves through times of financial distress.
For investors who are looking for a steady and passive income that can support them during times of a volatile stock market, monthly dividend stocks can be excellent investment opportunities. With their high payouts, these stocks can be quite tempting, particularly when it is paid monthly. While it can be a great way to enjoy some extra compounding, they are not without their risks. After all, investors may not necessarily want to depend solely on this group of stocks for monthly income. With all these in mind, here is a list of best monthly dividend stocks with high yields for you to check out.
Top Monthly Dividend Stocks To Watch Right Now
- EPR Properties (NYSE: EPR)
- Realty Income (NYSE: O)
- STAG Industrial (NYSE: STAG)
- Pembina Pipeline (NYSE: PBA)
EPR Properties is a REIT specializing in owning experiential real estate such as movie theaters like AMC Entertainment (NYSE: AMC), ski resorts and even gaming facilities. It secures these properties by signing triple-net leases with the venue operators. With Merck’s (NYSE: MRK) antiviral pill demonstrating high effectiveness in cutting hospitalization and death rate, coupled with wide availability of vaccines, there are reasons to be bullish in EPR stock.
There’s no question that COVID-19 has had a significant impact on experiential real estate. Many of these facilities had to temporarily shut their doors or operate at reduced capacities. And that had forced EPR Properties to suspend its monthly dividend last year. Now, more people are starting to enjoy outdoor experiences again. That has allowed EPR Properties to resume its high monthly dividend in July 2021. With an attractive dividend yield above 6%, do you have EPR stock on your watchlist today?
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Realty Income is another top monthly dividend stock many investors would be familiar with. After all, the company calls itself ‘The Monthly Dividend Company’. And going by its latest development, investors have a lot to be excited about. For starters, the company already owns more than 6,700 properties, most of which are occupied by retail tenants. What’s making Realty Income a compelling investment is its portfolio of strong clientele including Walmart (NYSE: WMT) and Dollar General (NYSE: DG). And these tenants should continue to do well and bring in stable revenue for the company.
Yet, Realty Income wants a bigger piece of the $12 trillion global net-lease addressable market. The REIT recently announced its acquisition of VEREIT (NYSE: VER). This acquisition will add more than 3,500 properties to Realty Income’s portfolio, sending its number of properties to over the 10,000 mark. Also, Realty Income plans to spin off all of its office properties into a separate REIT after the acquisition to ensure it remains concentrated in defensive industries. Given all of this, it seems to me that O stock is a great real estate stock that’s about to get even better.
STAG Industrial is a pure-play industrial REIT focusing on warehouses and light industrial facilities. The bulk of their portfolio consists of distribution warehouses with high-credit national tenants. These properties are in high demand as the pandemic served as a catalyst for e-commerce adoption. As more retail businesses move online, a large portion of retail real estate activity has moved into warehouses. Manufacturing activities are also ramping up in the U.S. to combat supply chain issues. At its current monthly payout, the stock is offering a 3.5% yield.
Notably, almost 40% of STAG Industrial’s portfolio handles e-commerce activities. With Amazon (NASDAQ: AMZN) and other e-retailers driving demand, industrial space has been rented at healthy rates. And these translate to profits, and by extension, dividends to investors. If you own STAG stock right now, you’re indirectly betting on megatrends such as e-commerce . Even if the share price drops to a lower level, dividends shouldn’t be much affected. This makes STAG stock one of the best monthly dividend stocks to buy for income investors.
Unlike the other monthly dividend stocks on this list, Pembina Pipeline is a Canadian company specializing in transportation and storage infrastructure for the oil and gas sector. The company proved its mettle as a top dividend stock when it maintained its dividend payout last year when many energy companies suspended or cut dividends as the oil markets crashed. The stock currently yields a hefty 6.3%. Majority of its income is from fee-based contracts, which explains why the company could not only pay but also increase dividends every year for the past two decades.
It should be able to continue increasing its dividend in the future as it continues to form strategic acquisitions that can add value to the company. For instance, the partnership with TC Energy (NYSE: TRP) could help companies meet their ESG goals and achieve net-zero emissions targets. Unfortunately, Pembina failed to acquire Inter Pipeline (OTCMKTS: IPPLF)earlier this year. Nevertheless, that suggests that Pembina is always on the lookout for growth opportunities. Even if the company fails to find other acquisition opportunities, it could also become an attractive takeover target for larger oil and gas companies. One way or another, PBA stock could still be in the position to continue its dividend growth for the foreseeable future.