According to the US Inflation Aggregate Index, the US dollar has lost 25% of its buying power since 2020. Regardless of statistics on inflation, which only refers to the speed rate of price increases, that means that everyday goods and services are an average 25% higher now for consumers.

24/7 Wall Street Insights

• With buying power down an average 25% from 2020, according to the US Inflation Aggregate Index, many households are falling short in making their monthly expenses.
• Certain dividend stocks which pay out dividends on a monthly basis, may be the solution for those holding investable assets.
• For investors seeking dividends, click here for a free report on two high dividend stocks.

With fuel, food, medicine and other essentials costing more, many people are having problems making ends meet, even when cutting household budgets to the bone. The remaining options, i.e. getting a side gig, or creating passive income from investments, leave few conventional choices available, but dividend stocks might be a solution worth considering – especially if monthly passive income is needed for paying bills or other expenses.

Monthly Dividends

Although stocks traditionally pay dividends on a quarterly basis, some stocks, which are Business Development Companies (BDC)s, Real Estate Investment Companies (REIT)s, or Master Limited Partnerships, elect to pay out on a monthly basis. All of these categories are required to pay 90% of profits to shareholders in exchange for their public status, so companies that elect to pay out monthly have an added cache for income-based investors. All of the other advantages, like liquidity, risk tolerance range, low relative cost – all hold for monthly dividend stocks as well. 

24/7 Wall Street’s gigantic database of dividend stocks has showcased numerous examples of dividend stocks in different combinations for research purposes. With enough variation for investors with all different requirements and backgrounds to find something of value, 24/7 Wall Street strives to provide its readers with useful information to aid in their investment decisions.

The 7 stocks listed below would provide a monthly passive income of nearly $825.00, on a total $70,000 investment divided equally, based on market prices at the time of this writing. This collection has a cumulative average APY of 14%.

AGNC Investment Corp.

Stock: AGNC Investment Corp. (NASDAQ: AGNC)

• Yield: 13.91%
• Shares for $10,000: 955
• Monthly/Annual Dividend: $115.92  /  $1,391.00

REITs can focus on a range of sub-categories in the real estate realm that can generate hefty returns if managed in a strategic fashion. AGNC Investment Corp. is based in Bethesda, MD, and invests almost exclusively in US Government Agency mortgage securities, such as Fannie Mae, Freddie Mac and Ginny Mae. However, it uses leverage via repurchase agreements and aggressively incorporates hedging strategies and derivatives to both protect portfolio assets as well as to enhance returns. 

Due to market volatility, AGNC has shifted this year into a more defensive position with significant hedge protection. The company prudently repositioned certain credit-focused holdings, trimmed its non-agency portfolio and increased exposure to higher-coupon holdings. These asset-selection efforts were taken to strategically offer greater stability of cash flows and set the stage for long-term growth.

Armour Residential REIT

Stock: Armour Residential REIT (NYSE: ARR)

• Yield: 14.32%
• Shares for $10,000: 489
• Monthly/Annual Dividend: $119.33  /  $1,432.00

Located in Vero Beach, FL, Armour Residential REIT, Inc. is a real estate investment trust that manages a portfolio of US agency backed mortgage securities from Freddie Mac, Fannie Mae, and Ginny Mae. While Armour Residential REIT, Inc. delivers a very high dividend, analysts’ perspectives on its upside potential are mixed. That said, the company holds a 14-year streak of consistent dividend payments, 

Stellus Capital Investment Corp.

Stock: Stellus Capital Investment Corp. (NYSE: SCM)

• Yield: 11.70%
• Shares for $10,000: 731
• Monthly/Annual Dividend: $97.50  /  $1,170.00

Participating in both the private corporate debt and equity markets, Houston, TX headquartered Stellus Capital Investment Corp. is a BDC that finances deals for American and Canadian companies with EBITDA between $5 million and $50 million. Their origination underwritings may manifest in several configurations, such as first lien, second lien, unitranche, and mezzanine debt, often accompanied with an equity portion. 

Prospect Capital Corporation

Stock: Prospect Capital Corporation (NASDAQ: PSEC)

• Yield: 13.24%
• Shares for $10,000: 1,828
• Monthly/Annual Dividend: $110.33  /  $1,324.00

Just a stone’s throw away from Grand Central Station in New York City, Prospect Capital Corporation is a business development company (BDC) focused on the private corporate credit arena. This often entails origination of secured debt, senior debt, mezzanine debt, first lien debt and other types of loan structures for later stage and emerging growth companies. Some examples of use of proceeds can include leveraged buyouts, refinancing, recapitalizations, acquisitions, turnarounds, bridge loans, and other corporate needs.

Prospect Capital’s sweet spot for investing is between $10 million and $500 million per transaction for a solo investment. Prospect will also do larger deals via syndication and/or agented basis. Qualifying prospect companies must have EBITDA between $5 million and $150 million, enterprise value between $5 million and $1 billion, and sales value between $25 million and $500 million. 

As a testament to its dividend consistency and reliability, Prospect Capital Corporation has unfailingly paid its monthly dividend for 85 consecutive months to date. 

Oxford Square Capital Corp.

Stock: Oxford Square Capital Corp. (NASDAQ: OXSQ)

• Yield: 15.16%
• Shares for $10,000: 3,610
• Monthly/Annual Dividend: $126.33  /  $1,516.00

Based in Greenwich, CT, Oxford Square has both BDC and investment management facets, with a particular affinity for debt and/or equities for companies in the tech sector. In particular, Oxford Square has interest in, but not limited to:

• Computer software, Infotech 
• Media and Telecommunications 
• Semiconductors 
• Technology-enabled services
• Healthcare tech

Orchid Island Capital

Stock: Orchid Island Capital (NYSE: ORC)

• Yield: 18.18%
• Shares for $10,000: 1,230
• Monthly/Annual Dividend: $151.50  /  $1,818.00

Based in Vero Beach, FL, Orchid Island Capital, Inc. is a REIT that specializes in investments of Residential Mortgage Backed Securities (RMBS). Its $3.9 billion AUM portfolio includes single resident mortgages, collateralized mortgage obligations (CMO), mortgage pass-through certificates, as well as interest-only, principal-only, and other types of securities and mortgage related paper.  Orchid Island Capital’s top three institutional holders are BlackRock, Vanguard, and Geode Capital Management. 

Horizon Technology Finance Corp.

Stock: Horizon Technology Finance Corp. (NASDAQ: HRZN)

• Yield: 12.48%
• Shares for $10,000: 939
• Monthly/Annual Dividend: $104.00  /  $1,248.00

With a preference towards the technology, biotech, healthcare, cleantech, and sustainability sectors, Farmington, CT headquartered Horizon Technology Finance Corp. provides venture and secured debt financing structures to qualifying growth-stage companies.

Name	Yield	Monthly Dividend Income
AGNC Investment Corp. (NASDAQ: AGNC)	13.91%	$115.92
Armour Residential REIT (NYSE: ARR)	14.32%	$119.33
Stellus Capital Investment Corp. (NYSE: SCM)	11.70%	$ 97.50
Prospect Capital Corporation (NASDAQ: PSEC)	13.24%	$110.33
Oxford Square Capital Corp. (NASDAQ: OXSQ)	15.16%	$126.33
Orchid Island Capital (NYSE: ORC)	18.18%	$151.50
Horizon Technology Finance Corp. (NASDAQ: HRZN)	12.48%	$104.00
Total Monthly Dividend		$824.91

 

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