While most companies pay dividends on a quarterly basis, monthly dividend stocks distribute their dividend payouts 12 times a year.
The reason companies pay dividends every month instead of quarterly, semi-annually, or annually are unique to each company. But, a good number choose to distribute dividends monthly to keep a close rein on their cash flow, since dividends are paid from profits.
Investors pile into monthly dividend payers for a number of reasons. Some use them as a means of getting a steady stream of income. Some find it an efficient way to budget for expenses each month. And, some simply enjoy the frequency of getting a dividend payment 12 times a year instead of once, or every three or six months.
Plus, owning dividend-paying stocks, in general, carries the added benefit that dividend payments can increase, and moreover, dividend-paying stocks are historically better performers than non-payers.
And while quarterly and monthly dividend payers aren't immune to market gyrations, studies show they provide healthier returns than non-payers. For instance, in the rocky months of March and April, returns for dividend payers averaged 1.3% and 0.89% respectively versus negative 2.3% and 2.6% respectively for nonpayers, according to FactSet.
All dividend payers, however, are not created equal - simply chasing yield is never prudent. With that in mind, following are five monthly dividends stocks with stable businesses, reliable dividend payment track records, and attractive yields.
Five Monthly Dividend Stocks for Yield and Income
Goldcorp Inc. USA (NYSE: GG) is one of the fastest-growing, lowest-cost senior gold producers. Operations and development projects are in politically stable jurisdictions throughout North, Central, and South America. Its strong project pipeline is positioned to drive long-term, sustainable growth. Despite a difficult year for gold miners in general, dividends paid by Goldcorp in 2013 totaled $486 million, up from $438 million in 2012. Dividends were also boosted in 2010 and 2011. GG's present monthly payout is a nickel a share for a 2.59% yield.
Citigroup rates GG a "Buy" and says it's "one of the few large gold producers who we estimate will deliver meaningful low-cost growth ounces over the next several years." GG stock is up 6.69% year to date and traded at $23.03 Friday.
While GG's yield is solid, this next monthly dividend payer yields about three times as much...
EPR Properties (NYSE: EPR) is a real estate investment trust (REIT) that develops, owns, leases, and finances entertainment and related properties in the United States and Canada. Properties include megaplex theaters, entertainment retail centers, and destination recreational and specialty properties.
Barron's believes theater stocks are poised to outperform not just because of a string of blockbuster years at box offices, but also because of industry consolidation and rising real estate leasing rates. That's good news for EPR, which turns rents paid by theater chains into income for investors. Founded in 1997 and based in Kansas City, Mo., EPR pays a monthly dividend of $0.28 per share for a 6.35% yield. EPR shares are up 9.95% so far in 2014 and traded at $54.05 today (Friday).
Prospect Capital Corp. (Nasdaq: PSEC) is a business development company specializing in middle market, mature, emerging growth, buyouts, turnarounds, and recapitalizations. It typically invests across all industry sectors, with a particular expertise in the energy and industrial sectors. The NYC-based company began paying quarterly dividends in 2004 and switched to monthly payouts in June 2010. Since then, monthly payments have continued without interruption and have been regularly increased.
PSEC trades at a modest price-to-earnings ratio of 8.29, and its current monthly distribution is $0.11 per share for a 13.20% yield. On Thursday, Evercore upgraded PSEC to "Equal Weight" from "Underweight," citing valuation.
Shaw Communications Inc. (NYSE: SJR) provides broadband cable television, Internet, home telecommunications, satellite, direct-to-home, and programming content services to residential and business customers in Canada and the United States. Expanding its reach, the company has also invested heavily in Wi-Fi hot spots. A household name in Canada, SJR's profits, revenue, and stock price continue to grow. Also repeatedly growing is SJR's steady monthly dividend of $0.08 a share for a yield over 4%.
Vanguard Natural Resources LLC (Nasdaq: VNR) acquires and develops oil and natural gas properties in key regions throughout the United States. At the end of 2013, the company had total proved reserves of 172.2 million barrels of oil equivalent, as well as ownership of working interest in 7,277 productive wells and approximately 797,118 undeveloped acres. Founded in 2006 and headquartered in Houston, Texas, this monthly dividend stock has been paying out continuously since 2008, with frequent increases. VNR's current monthly payout is $0.21 per share for a yield of 8.22%.
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