In this article, we discuss 11 best stocks that pay monthly dividends in 2024. You can skip our detailed analysis of dividend stocks and their performance over the years, and go directly to read 5 Best Stocks That Pay Monthly Dividends in 2024.
Dividend income has risen from 2.85% in 1981 to 5.89% in 2014, while interest income has decreased from 13.5% to 8.6% during the same timeframe, as reported by S&P Dow Jones Indices. In addition to this, looking back to 1960, 69% of the overall return of the S&P 500 Index can be credited to the reinvestment of dividends and the compounded growth they generate over time.
There has been a new angle on dividend investing cropping up lately. Traditionally, investors leaned towards companies offering hefty dividends, assuming they were more dependable. However, recent studies suggest that companies maintaining a balance with sustainable dividends, without excessively high payouts, have actually yielded superior returns over the long term. A research conducted by Wellington Management split dividend-paying companies into five groups and then sorted them based on their payout levels from highest to lowest. Surprisingly, the companies that performed better than the S&P 500 Index fell into the second-highest quintile rather than the highest. This unexpected outcome suggests that some companies may have been overdoing it with their dividend payouts, leaving themselves with less capital for future growth. Meanwhile, companies with more moderate payouts were able to reinvest their earnings and maintain enough flexibility to continue offering steady dividends in the long run.
Apart from reliable dividends, the growth of dividends is also crucial to contemplate when investing in dividend stocks. According to research conducted by Ned Davis Research, companies that either increased or began paying dividends yielded the highest returns compared to other stocks, and they exhibited considerably less volatility. Additionally, the study highlighted a robust relationship between companies that consistently enhance their dividends and those boasting strong fundamentals, well-defined business strategies, and a sincere dedication to their shareholders. The Procter & Gamble Company (NYSE:PG), Colgate-Palmolive Company (NYSE:CL), and PepsiCo, Inc. (NASDAQ:PEP) stand out as top choices for dividend investors. These companies have demonstrated a strong dedication to their shareholders by consistently increasing their dividend payouts over many years.
While it's difficult to forecast the stock market's performance with absolute certainty, analysts are optimistic about dividend-paying stocks for 2024, especially following their subpar performance in 2023. In the Bloomberg Outlook report, analysts from Citigroup offered their perspective on investing in dividend stocks for the year 2024. Here are the comments:
“With investors swept up in the artificial intelligence fervor, valuations for dividend-paying stocks have quietly drifted toward multi-decade lows compared to the broader market. With growth expected to moderate in 2024, and the potential for recession lingering, dividends may take a more prominent role in driving total returns for investors.”
While many major companies pay dividends on a quarterly basis, we will discuss some of the best dividend stocks that pay monthly dividends to shareholders.
For this list, we reviewed companies providing monthly dividends to their shareholders. Among these, we specifically chose businesses with robust dividend practices, consistently maintaining their payouts across multiple years. The majority of these selected companies operate within the Real Estate Investment Trust (REIT) sector, as they are mandated to allocate 90% of their income towards dividends. The stocks are ranked in ascending order of the number of hedge funds having stakes in them, according to Insider Monkey’s database of Q3 2023. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.
Gladstone Commercial Corporation (NASDAQ:GOOD) is a real estate investment trust (REIT) that focuses on acquiring, owning, and managing primarily industrial and office properties. The company's portfolio typically includes single-tenant and anchored multi-tenant net leased properties. The company currently pays a monthly dividend of $0.10 per share and has a dividend yield of 9.68%, as of February 23.
In addition to popular quarterly dividend stocks such as The Procter & Gamble Company (NYSE:PG), Colgate-Palmolive Company (NYSE:CL), and PepsiCo, Inc. (NASDAQ:PEP), GOOD can also be a reliable investment option for income investors.
At the end of Q4 2023, 5 hedge funds tracked by Insider Monkey reported having stakes in Gladstone Commercial Corporation (NASDAQ:GOOD), the same as in the previous quarter. The consolidated value of these stakes is over $25.7 million.
ARMOUR Residential REIT, Inc. (NYSE:ARR) is a real estate investment trust (REIT) that primarily focuses on investing in residential mortgage-backed securities (RMBS). These securities are backed by residential mortgage loans, typically those guaranteed by government-sponsored enterprises. On February 14, the company announced a monthly dividend of $0.24 per share, which was consistent with its previous dividend. It has been paying regular dividends to shareholders since 2010, which makes ARR one of the best dividend stocks that pay monthly dividends. The stock has a dividend yield of 15.15%, as of February 23.
As of the close of Q4 2023, 6 hedge funds in Insider Monkey's database held stakes in ARMOUR Residential REIT, Inc. (NYSE:ARR), compared with 7 in the preceding quarter. The collective value of these stakes is roughly $20 million. Among these hedge funds, Balyasny Asset Management was the company's leading stakeholder in Q4.
LTC Properties, Inc. (NYSE:LTC) is a California-based real estate investment trust company that specializes in senior housing and healthcare properties. The company primarily invests in and manages a diverse portfolio of senior housing and long-term healthcare facilities across the US. In the fourth quarter of 2023, the company reported revenue of $50.2 million, which showed a 5% growth from the same period last year. It ended the quarter with $20.2 million available in cash and cash equivalents, up from $10.3 million in the prior-year period.
LTC Properties, Inc. (NYSE:LTC), one of the best dividend stocks, offers a monthly dividend of $0.19 per share. The stock's dividend yield on February 23 came in at 7.10%.
Insider Monkey's database of Q4 2023 indicated that 11 hedge funds owned stakes in LTC Properties, Inc. (NYSE:LTC), which remained unchanged from the previous quarter. These stakes have a total value of over $27.3 million.
Prospect Capital Corporation (NASDAQ:PSEC) is a business development company that primarily focuses on providing debt and equity financing to middle-market companies in the US. As a BDC, the invests in a wide range of industries and sectors, including manufacturing, healthcare, energy, technology, and consumer goods. On February 9, the company declared a monthly dividend of $0.06 per share, which fell in line with its previous dividend. It is one of the best dividend stocks on our list as the company has been paying regular dividends to shareholders for the past 78 consecutive months. As of February 23, the stock has a dividend yield of 12.54%.
Prospect Capital Corporation (NASDAQ:PSEC) was a part of 12 hedge fund portfolios at the end of Q4 2023, up from 9 in the previous quarter, according to Insider Monkey's database. The stakes owned by these hedge funds have a total value of more than $14.3 million. Marshall Wace LLP owned the largest stake in the company in Q4.
Main Street Capital Corporation (NYSE:MAIN) is another business development company that made it to our list of the best dividend stocks that pay monthly dividends. The company offers a variety of financing solutions to its portfolio companies, including first and second-lien-secured loans, mezzanine debt, and equity investments. It announced a monthly dividend of $0.24 per share on February 21, which was in line with its previous dividend. The company has been paying regular dividends to shareholders since 2007. The stock's dividend yield on February 23 came in at 6.35%.
At the end of December 2023, 13 hedge funds in Insider Monkey's database owned investments in Main Street Capital Corporation (NYSE:MAIN), growing from 12 in the preceding quarter. The consolidated value of these stakes is over $52.8 million.
AGNC Investment Corp. (NASDAQ:AGNC) ranks sixth on our list of the best dividend stocks that pay monthly dividends. The Maryland-based real estate investment trust company primarily invests in agency mortgage-backed securities (MBS) and focuses on investing in residential MBS guaranteed by government-sponsored enterprises. The company initiated its dividend policy in 2008 and has been paying uninterrupted dividends to shareholders since then. It currently pays a monthly dividend of $0.12 per share for a dividend yield of 15.14%, as of February 23.
The number of hedge funds tracked by Insider Monkey owning stakes in AGNC Investment Corp. (NASDAQ:AGNC) stood at 14 in Q4 2023, down from 18 in the previous quarter. The collective value of these stakes is more than $43.4 million. With over 1.5 million shares, Centiva Capital was the company's leading stakeholder in Q4.
