For many dividend investors, finding the right mix of yield and long-term capital appreciation upside is very difficult. But when investors add in other factors such as dividend distribution frequency (monthly, quarterly, annually, etc.), the search to find the best options in the market becomes markedly more difficult.
For many investors, finding monthly dividend paying stocks is very valuable, as such stocks can provide the frequent income needed to pay one’s bills without having to liquidate a portion of one’s portfolio. In other words, such stocks can provide the consistent income needed to support an enjoyable retirement, or fund one’s travel expenses, for example.
This article will explore three top high-yielding monthly dividend stocks every investor ought to look at.
Let’s dive in!
Whitecap Resources (SPYGF)
The only energy company to make this list, Whitecap Resources (OTCMKTS:SPYGF) is a top Canadian energy producer focused on its Western Canadian oil and gas properties. As a Canadian producer, it appears to me that Whitecap largely falls under the radar for most investors, with the stock’s impressive dividend yield of 8% overlooked in favor of larger U.S.-based companies.
That’s fair, particularly for investors who value stability over potential future growth. However, on the growth front, Whitecap hasn’t been a slouch with strong production leading to a price-earnings ratio under 6. This puts Whitecap firmly in the value category, even for energy stocks, and makes its 8% yield seem unreasonably high.
That’s even more true when investors consider that its dividend looks sustainable, given Whitecap’s payout ratio of less than 50%. And factoring in average dividend growth over the past three years of 30%, there’s reason why this stock should be viewed as a passive income magnet for dividend investors of all stripes.
Of course, the company’s current valuation and yield do suggest that the market is pricing in higher-than-average risk with this name. But given how robust oil prices have been of late, outside of a recession or major shock, this is a stock that should be viewed as a top monthly income play in my books right now.
Slate Grocery REIT (SRRTF)
The first real estate investment trust (REIT) on this list is Slate Grocery REIT (OTCMKTS:SRRTF). Another top pink-sheet listed Canadian stock, Slate Grocery REIT focuses its operations on long-term retail real estate in key Canadian markets with top-tier grocery anchor tenants underpinning its properties.
The same thesis really as Whitecap applies to Slate Grocery REIT. As a stock traded on the pink sheets, the company’s 8.2% dividend yield really doesn’t get the attention it should from investors.
The company has maintained strong earnings, driven by an occupancy rate above 94% (thanks to its core grocery retail partners like Kroger and Walmart which bless most of the company’s locations). Accordingly, with less investor eyeballs on this name (and some concerns surrounding retail real estate), this is a stock that’s trading well below its historical valuation multiple.
In my view, the company’s focus on operational efficiency, monthly dividend track record, and potential for capital appreciation make SRRTF stock one to consider right now.
Realty Income (O)
Rounding out this list of monthly dividend stocks worth considering is Realty Income (NYSE:O | O Price Prediction). Realty Income is a company I’ve featured in the past, and with a dividend yield of 5.6%, it’s debatable (at least among some investors) as to whether this stock would qualify as a “high-yield” monthly dividend stock.
Of course, a 5.6% yield is much better than you’ll find among nearly any sector of the economy. In the REIT space, I’d say this yield is relatively par for the course. But for investors looking for bond-like fixed income above 5%, this is the sort of risk/reward play I think makes sense.
Unlike Slate Grocery REIT, Realty Income benefits from being listed in the U.S. What this means is investors need to pay up, to a certain extent, for ownership of this company.
But with extremely high occupancy rates (above 98%) and a world-class portfolio of real estate in a number of key North American markets, this is a stock I think still warrants consideration. Finding a company that provides predictable and inflation-resistant income is what we should all be after right now. In that regard, Realty Income looks like a winner.
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