Most dividend stocks dish out a payment once every quarter, which is fine. Most investors seem to not actually need that income immediately, instead opting to reinvest those dividends in more shares of the paying company.
If you’re living off of your dividends, though, that payout cadence can be a bit of a pain. Although you’re collecting reliable income every three months, your mobile phone, utility, and credit card bills are coming due every month.
There is a solution. Although they’re relatively rare, a handful of companies make dividend payments every month rather than every quarter. Here’s a rundown of three you should consider.
1. Dividend yield of Gladstone Capital: 7.1%
In the form of loans to medium-sized enterprises Gladstone Capital (NASDAQ: GLAD) provides capital.
It is organized as a business development company, although a private equity or risk capital fund could just as equally be considered. The Belnick office furniture brand, the Defiance Integrated Technologies truck axle and the Cafe Zupas restaurant chain include some of its customers.
The business model is ideal for payment of dividends. These medium-sized enterprises are risky, but not necessarily doomed. They are ready to take loans that reflect their relative risk at above-average interest rates and Gladstone is pleased to lend the money to these young, high-potential companies. And these are reimbursed over time, like any other loan. Some of these payments are simply forwarded to shareholders.
In no month since 2003, Gladstone Capital has made a dividend payment. That’s when it started to dissolve them monthly.
It is able to afford these payments more than enough, as they earn $0.81 per share from its $0.78 full-year dividend payments in its COVID-19 crimped fiscal year 2020. This year’s forecast profit/payout cushions of $1,11 per share, supported by new credit originations that exceed repayments for loan, would increase dramatically.
2. Income from real estate Return on the dividend: 4.2%
The coronavirus pandemic in most industries was rough, but for already difficult retailers it was absolutely brutal. According to CoStar Group, 12,200 stores were shutdown permanently last year. The result is now that retail landlords suffer.
However, not all retail property owners. One of them is just okay. Real estate revenues (NYSE:O) were able to receive 93.6% of the rent that was due for the last quarter of the year and similar revenues decreased in the fourth quarter less than 2% over the course of the year. The same measurements were made for the first quarter for the REIT (immobiliary investment trust), indicating that the COVID-19 retail sector is still falling sharply.
This largely depends on the tenant list of the company. His five biggest renters included the Family Dollar brand Walgreens, 7-Eleven, Dollar General, FedEx, and the Dollar Tree. Also important tenants are Walmart and Kroger. Not only did the organisation, but they also benefited from the impact of the coronavirus pandemic.
Be aware that an imminent fusion with VEREIT has caused some concern. Not only are the two REITs organized differently, but VEREIT is in the midst of a turnaround effort.
However, these concerns can be overblown. Moody’s debt-rating agency says this acquisition will boost the ‘scale and durability of cash flow’ of Realty Income, creating synergies through combining both complementary portfolios.
3. Industrial DAY 3. Return on dividends: 4.1%
Finally, add to your list of strong dividends stocks which make monthly payments, STAG Industrial (NYSE:STAG).
STAG Industrial is organized as a REIT, like real estate revenue. However, STAG targets a completely different type of tenant, unlike real estate income. This investment trust provides a wide range of renters with a single-leaner industrial and commercial space. No tenant is responsible for more than 4% of his rents, and only 8% of his annual base rent comes from any business industry. STAG Industrial also (rightly) claims that approximately 40% of the renters participate in e-commerce and protect them from the pandemic.
The way STAG took advantage of the environment to do more of what it does best is largely overlooked. The properties are purchased and redeveloped for the best cash flow. Six buildings covering 1.3 million cubic feet of industrial area were purchased last quarter and while four buildings were also sold in the same quarter, they were sold for profits. The occupancy rate was 97 percent for the same quarter, and all rents ended in the three month period. The rate was 97 percent.
This is a REIT not even built for duration but built to perpetually increase revenue since 2011 every year. Even if less consistently, operations revenues have grown as well and the dividend has not increased greatly since 2015, but they are paid every month as clockwork.
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