In this article, we discuss 13 cheap monthly dividend stocks to buy. You can skip our detailed analysis of dividend stocks and their previous performance, and go directly to read 5 Cheap Monthly Dividend Stocks to Buy.
According to a Wisdom Tree report, dividends have increased by an average of 5.7% annually since 1957—over 2% higher than inflation. Professor Jeremy Siegel calls these stocks "Super TIPS" because they offer protection against inflation in the long run, along with real growth. This held true during high-inflation periods like the '70s and '80s, where inflation averaged over 6%, and also during low-inflation periods, like the last three decades. The report also mentioned that dividends tend to be steadier compared to stock prices. Over the past 64 years, dividends decreased in merely six years, and and saw a drop of more than 5% during a single year. However, during the same time frame, stock prices experienced declines in 18 years. The most significant decrease in a calendar year was over 40%, and the average decline amounted to more than 11%.
US companies have aimed to keep their dividends stable, considering what investors prefer. In the third quarter of 2023, most big U.S. companies that pay dividends either increased their payouts or kept them the same, which led to a 4.5% rise in the cash they distributed. This outpaced the global trend, as per a recent Janus Henderson report. However, the report also mentioned that the growth rate of U.S. dividends has been slowing down for eight quarters in a row due to concerns about the economy after the Federal Reserve aimed to control inflation by raising interest rates. Despite this, the U.S. is on track to set a record for total dividend payouts in 2023, having already paid out $146.6 billion just in the third quarter.
AbbVie Inc. (NYSE:ABBV), Target Corporation (NYSE:TGT), and Kimberly-Clark Corporation (NYSE:KMB) are notable for being strong dividend stocks that pay dividends to shareholders every quarter. They're among the many companies that follow this quarterly dividend payout schedule. However, it's worth noting that while these companies pay dividends on a quarterly basis, there are plenty of other stocks in the market that offer a different schedule, paying dividends monthly instead of every three months. This diverse range of dividend payment frequencies provides investors with options to choose based on their preferences and investment strategies. In this article, we will have a look at some of the best dividend stocks that pay monthly dividends to shareholders.
13 Cheap Monthly Dividend Stocks to Buy
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Our Methodology:
We made this list by focusing on stocks that pay monthly dividends and have a trailing twelve-month (TTM) price-to-earnings (P/E) ratio below 25. Since a lot of companies that offer monthly dividends are in the real estate investment trust (REIT) sector, most of the stocks on our list are from this particular industry. The stocks are ranked in ascending order of P/E ratios.
13. Stellus Capital Investment Corporation (NYSE:SCM)
P/E Ratio (TTM): 24.33
Stellus Capital Investment Corporation (NYSE:SCM) is an American business development company that primarily focuses on providing financing solutions to middle-market companies. The company offers a monthly dividend of $0.1333 per share and has a dividend yield of 12.16%, as of November 17. It has been paying regular dividends to shareholders since 2012, which makes it one of the best dividend stocks on our list.
In addition to AbbVie Inc. (NYSE:ABBV), Target Corporation (NYSE:TGT), and Kimberly-Clark Corporation (NYSE:KMB), investors can also add SCM to their dividend portfolios because of the company's monthly payouts.
As of the close of Q2 2023, 4 hedge funds tracked by Insider Monkey reported having stakes in Stellus Capital Investment Corporation (NYSE:SCM), up from 3 in the previous quarter. The consolidated value of these stakes is more than $11.2 million.
EPR Properties (NYSE:EPR) is a Missouri-based real estate investment trust company that specializes in owning, acquiring, and managing properties in sectors such as entertainment, recreation, and education. The company was a part of 19 hedge fund portfolios at the end of Q2 2023, which remained the same from the previous quarter. The stakes owned by these funds have a collective value of over $208 million.
EPR Properties (NYSE:EPR) is one of the best dividend stocks on our list as the company has been making uninterrupted dividend payments to shareholders since 1997. The company pays a monthly dividend of $0.275 per share and has a dividend yield of 7.27%, as of November 17.
Apple Hospitality REIT, Inc. (NYSE:APLE) is a real estate investment trust company that focuses on acquiring and owning a portfolio of upscale select-service hotels across the US. On October 19, the company declared a monthly dividend of $0.08 per share, which was in line with its previous dividend. The stock has a dividend yield of 5.84%, as of November 17.
As of the close of Q2 2023, 17 hedge funds in Insider Monkey's database owned stakes in Apple Hospitality REIT, Inc. (NYSE:APLE), down from 18 in the previous quarter. The consolidated value of these stakes is over $62.6 million. With roughly 1.6 million shares, Millennium Management was the company's leading stakeholder in Q2.
AGNC Investment Corp. (NASDAQ:AGNC) operates as a real estate investment trust company that invests in residential mortgage-backed securities. The company finances these investments by borrowing money at short-term interest rates and investing in higher-yielding mortgage securities, thereby aiming to earn a profit on the interest rate spread.
AGNC Investment Corp. (NASDAQ:AGNC) initiated its dividend policy in 2008 and has paid regular dividends to shareholders since then, which makes AGNC one of the best dividend stocks on our list. Its monthly dividend currently comes in at $0.12 per share and has a dividend yield of 16.59%, as of November 17.
At the end of June 2023, 18 hedge funds in Insider Monkey's database owned stakes in AGNC Investment Corp. (NASDAQ:AGNC), compared with 24 in the previous quarter. These stakes are collectively valued at over $102.4 million.
LTC Properties, Inc. (NYSE:LTC) invests in senior housing and healthcare properties in the US. These properties are leased or mortgaged to healthcare operators, including both regional and national healthcare companies. On October 2, the company declared a monthly dividend of $0.19 per share, which was consistent with its previous dividend. It is one of the best dividend stocks on our list as the company has been making regular dividend payments to shareholders for the past 31 years. As of November 17, the stock has a dividend yield of 6.99%.
According to Insider Monkey's database of Q2 2023, 8 hedge funds owned stakes in LTC Properties, Inc. (NYSE:LTC), down from 10 in the previous quarter. These stakes have a total value of over $7.4 million. Among these hedge funds, Marshall Wace LLP was the company's leading stakeholder in Q2.
An American real estate investment trust company, Ellington Residential Mortgage REIT (NYSE:EARN) is next on our list of the best dividend stocks. On November 7, the company announced a monthly dividend of $0.08 per share, which fell in line with its previous dividend. The stock has a dividend yield of 16.08%, as of November 17.
As of the end of Q2 2023, 6 hedge funds in Insider Monkey's database owned stakes in Ellington Residential Mortgage REIT (NYSE:EARN), the same as in the previous quarter. These stakes have a consolidated value of over $3 million.
Whitestone REIT (NYSE:WSR) is a Texas-based real estate investment trust company that focuses on owning, operating, and leasing commercial properties in culturally rich neighborhoods, primarily in markets within the US. The company has an 11-year run of paying regular dividends to shareholders and currently pays a monthly dividend of $0.04 per share. The stock's dividend yield on November 17 came in at 4.38%.
As of the end of Q2 2023, 10 hedge funds in Insider Monkey's database reported having stakes in Whitestone REIT (NYSE:WSR), down from 12 in the previous quarter. The overall value of these stakes is more than $20 million.
U.S. Global Investors, Inc. (NASDAQ:GROW) is an investment management firm that focuses on providing investment advisory services, primarily to institutional and individual investors. The firm also offers advisory services to clients seeking guidance on investment strategies, portfolio management, and asset allocation based on their financial goals and risk tolerance.
U.S. Global Investors, Inc. (NASDAQ:GROW), one of the best dividend stocks, pays a monthly dividend of $0.0075 per share. The stock has a dividend yield of 3.26%, as of November 17.
The number of hedge funds tracked by Insider Monkey owning stakes in U.S. Global Investors, Inc. (NASDAQ:GROW) stood at 5 in Q2 2023, which remained unchanged from its previous dividend. The collective value of these stakes is roughly $2 million. Royce & Associates was the largest stakeholder of the company in the second quarter.
