Dividend stocks are a great way for investors to generate some ongoing income from their investments rather than relying solely on capital appreciation. And many are looking for the best monthly dividend stocks for 2022. It can take years for stocks to appreciate enough to sell them at a profit. And dividend stocks can help fill that gap as you build your portfolio.
But even dividend stocks don’t always provide the consistent income some investors need. In many cases, they only pay a dividend occasionally, or they might pay dividends quarterly. However, while that can be a nice bonus, it can leave long gaps if you want dividends to be a significant source of income.
Hence, this list will focus on some of the best monthly dividend stocks. As their name implies, monthly dividend stocks pay dividends every month. In some cases, they pay nearly one percent of the share price in monthly stock dividends. Imagine having a $1 million portfolio and getting $8,000 every month in dividends, that is the power of monthly dividend stocks.
Here are the best monthly dividend stocks to buy right now:
- Ellington Financial Inc. (NYSE: EFC)
- AGNC Investment Corp. (Nasdaq: AGNC)
- Stellus Capital Investment Corp. (NYSE: SCM)
- Prospect Capital Corporation (Nasdaq: PSEC)
- Sabine Royalty Trust (NYSE: SBR)
Monthly Dividend Stocks To Buy
Let’s take a closer look at each of the best monthly dividend stocks and why they are worth a buy.
No. 5 Ellington Financial Inc.
Dividend yield: 10.30%
Ellington Financial is a financial firm that invests in a variety of types of businesses. These include residential mortgage-backed securities (MBS), consumer loans, equity investments in loan origination companies, and other strategic investments. In essence, the company invests in income-generating assets. The company was founded in 2007 and is based in Old Greenwich, Connecticut.
The reason this stock makes the list of best monthly dividends stocks, though, is its dividend payouts. Its shares currently sell for less than $20 each, and it has been paying a dividend of about 10% annually. Shares of EFC pay a dividend the last week of the month, though the day of the week varies. For each of the past nine months, it has paid a dividend of 15 cents per share every month.
No. 4 AGNC Investment Corp.
Dividend yield: 9.78%
AGNC is an internally managed real estate investment trust (REIT) founded in 2008. The company invests primarily in agency residential mortgage-backed securities on a leveraged basis. Those securities are financed with collateralized borrowings structured as repurchase agreements. This business model is common among stocks that frequently pay dividends.
Shares of AGNC pay a monthly dividend on one of the last few days of each month. The company adjusts its dividend typically once or twice per year, but it has been paying a monthly dividend of 12 cents per share since April 2020. Its shares sell for $15 at the moment, which equates to an annual dividend of nearly 10%.
Keep reading for more info on the best monthly dividend stocks.
No. 3 Prospect Capital Corporation
Dividend yield: 8.81%
Prospect Capital Corporation is what’s known as a business development company (BDC). Hence, its function is to invest via debt and equity investments in the U.S. middle market in a variety of industries. It seeks to deliver steady, attractive returns for investors, and it pays a healthy monthly dividend as a result.
Shares of PSEC trade for under $10 per share currently, and they pay a monthly dividend at the end of the month. In addition, PSEC has paid the most consistent dividend of any of the monthly dividend stocks on this list. Its dividend payout hasn’t changed since August 2017. Currently, the stock is paying a monthly dividend of six cents per share, which works out to an annual yield of nearly 9%. Many investors are adding this stock to their list of the best monthly dividend stocks.
Best Monthly Dividend Stocks No. 2 Stellus Capital Investment Corp.
Dividend yield: 8.36%
Stellus Capital Management, which trades under the name Capital Investment Corp., invests in lower middle-market businesses with the goal of helping them succeed while providing the best possible returns for investors. This is similar to the business model of Prospect Capital. Stellus was founded in 2012 and is based in Houston, Texas.
Shares of SCM pay a monthly dividend, usually at the end of the month, though occasionally in the middle of the month. SCM is currently priced below $15, and its annual dividend yield is nearly 8.5%. Its exact dividend yield sometimes remains the same for several months, and sometimes the yield only remains for one month. In addition, the yield for January 2022 is 11.3 cents per share; the three months before that, it was 9.3 cents per share. Either way, this monthly dividend stock pays a generous yield.
Best Monthly Dividend Stocks No. 1 Sabine Royalty Trust
Dividend yield: 8.13%
Sabine Royalty Trust is what is known as an express trust. It receives a distribution from Sabine Corporation of royalty and mineral interests. These include minerals and production payments in undeveloped oil and gas properties located in Florida, Louisiana, Mississippi, New Mexico, Oklahoma and Texas. The company was founded in 1982 and is based in Dallas, Texas.
Shares of SBR pay a monthly dividend, usually on the 13, 14, or 15 of the month. This stock trades at a higher price than the others on this list, currently selling for around $50 per share. As such, its monthly dividends are higher, too. However, they vary quite a bit every month. In November 2020, its dividend was just 12 cents per share. Then in January 2022, it issued a dividend of 87 cents per share. Hence, it can be difficult to gauge the stock’s dividend yield, but it works out to about 8% in the long term.
About Bob Haegele
Bob Haegele is a personal finance writer who specializes in investing and planning for retirement. His hefty student loan burden inspired him to pay off his loans, and now he’s helping others get their finances in order. When he’s not writing, he enjoys travel and live music.