In this article, we will discuss the 11 high-growth monthly dividend stocks to buy. If you want to see more companies in this selection, go to the 5 High Growth Monthly Dividend Stocks to Buy.
High-growth monthly dividend stocks can be an attractive option for investors seeking both passive income and capital appreciation opportunities. These equities are often found in sectors like real estate, utilities, and healthcare that have solid fundamentals and consistent cash flows. Stocks that pay monthly dividends are popular amongst retirees and investors who depend on their dividend income to meet their expenses. Monthly dividends can be reinvested to buy additional shares of the stock, allowing investors to benefit from the power of compounding. Over time, reinvested dividends can increase the overall value of the investment.
The generation of equity total return is significantly influenced by dividends. According to a report published by S&P Dow Jones Indices, dividends have provided about 32% of the S&P 500’s overall return since 1926, while capital gains have made up 68% of the return. Thus, possible capital gains and stable dividend income are crucial components of total return expectations. Firms often use steady or growing dividend payouts as an indication of their confidence in their business prospects. In turn, market participants view such consistent dividend histories as a sign of the company’s maturity and financial strength. Furthermore, according to Adam Kramer, the manager of Fidelity’s Multi-Asset Income Fund (FMSDX), firms that offer a consistent and expanding dividend also have the capacity to enhance their cash flows to keep pace with inflation. This is due to the fact that many of these companies possess the ability to increase the prices they charge their clients to counterbalance their growing operating expenses.
According to Janus Henderson’s Global Dividend Index, US equities set a new record in 2021, with total dividends paid out amounting to $522.7 billion. This represents a 3.5% increase from 2020 and a substantial 28.6% increase since 2015. Janus identified Microsoft Corporation (NASDAQ:MSFT), AT&T Inc. (NYSE:T), Exxon Mobil Corporation (NYSE:XOM), and Apple Inc. (NASDAQ:AAPL) as the companies that issued the highest total dividends in 2021. Furthermore, in 2021, the aggregate annual cash dividends paid by S&P 500 companies increased to $511.2 billion, a 5.8% rise from 2020, when dividends for large-cap stocks on the index totaled $483.2 billion, as reported by S&P Dow Jones Indices. Since 2007, dividend payouts have more than doubled, growing from $246.6 billion. Some of the high-growth monthly dividend stocks in the market include Permian Basin Royalty Trust (NYSE:PBT), Dynex Capital, Inc. (NYSE:DX), and Mesa Royalty Trust (NYSE:MTR).
We conducted a comprehensive search for companies that pay monthly dividends, focusing on those with a track record of healthy dividend growth. Since the objective was to identify companies that paid not only consistent monthly dividends but also had strong financial fundamentals and growth potential for long-term investment purposes, we refined our list to include only the companies that reported at least 25% year-over-year (YoY) revenue growth for their most recent reported quarter. The stocks have been ranked in ascending order of their revenue growth.
High Growth Monthly Dividend Stocks to Buy
11. Agree Realty Corporation (NYSE:ADC)
YoY Revenue Growth for the Most Recent Reported Quarter: 27.6%
Monthly Dividend per Share: 24 cents
Agree Realty Corporation (NYSE:ADC) is a Farmington Hills, Michigan-based net lease real estate investment trust (REIT) founded in 1971 that is involved in acquiring and developing community shopping centers in the Midwestern and Southeastern US.
As a net lease REIT, the company has low overheads and passes on inflation to the tenants. The company had a portfolio of 1,839 properties as of December 2022. These properties are spread across 48 states of the US and have a gross leasable space of 38 million square feet (sqft). In a research note issued on February 15, Simon Yarmak at Stifel increased the target price for Agree Realty Corporation (NYSE:ADC) from $76.75 to $77.50 and maintained a Buy rating on the stock. The target price reflects a potential upside of 5.7% from the closing price as of February 28. You can read the company’s earnings call transcript for Q4 2022 here.
10. Realty Income Corporation (NYSE:O)
YoY Revenue Growth for the Most Recent Reported Quarter: 28.6%
Monthly Dividend per Share: 25.45 cents
Realty Income Corporation (NYSE:O) is a San Diego, California-based REIT that is also a constituent of the S&P 500 Dividend Aristocrat list.
The company generates rent from its 12,200 real estate properties that are under long-term net lease agreements. During its 54-year history, Realty Income Corporation (NYSE:O) has declared a monthly dividend for 632 consecutive months and has increased its monthly dividend on 119 occasions since going public in 1994. Furthermore, the stock has yielded an average return of 14.6% since going public and has outperformed the US REIT sector and the S&P 500 Index during the same period. Realty Income Corporation (NYSE:O) stock is termed as one of the best recession-proof stocks that also offer a monthly dividend.
9. AGNC Investment Corp. (NASDAQ:AGNC)
YoY Revenue Growth for the Most Recent Reported Quarter: 32.4%
Monthly Dividend per Share: 12 cents
AGNC Investment Corp. (NASDAQ:AGNC) is a Bethesda, Maryland-based REIT that is primarily involved in agency residential mortgage-backed securities (RMBS) on a leveraged basis. The operations of the business are primarily financed through collateralized borrowings.
In Q4 2022, AGNC reported a total comprehensive income of $1.17 per share and an economic return on tangible common equity of 12.3%. This was composed of $0.36 of declared dividends per common share and a rise in tangible net book value of $0.76 per share. The notable 8.4% increase in tangible net book value was largely attributable to a narrowing of spreads between mortgage assets and swap and treasury-based hedges. On February 9, Kenneth Lee at RBC Capital increased the target price for AGNC Investment Corp. (NASDAQ:AGNC) stock from $9 to $12 and reiterated an Outperform rating after the company posted strong Q4 2022 results and outperformed consensus forecasts. You can also check out AGNC Investment Corp.’s (NASDAQ:AGNC) earnings call transcript for Q4 2022 here.
Marshall Wace LLP raised its stake in AGNC Investment Corp. (NASDAQ:AGNC) by over 8000% during Q4 2022.
8. SLR Investment Corp. (NASDAQ:SLRC)
YoY Revenue Growth for the Most Recent Reported Quarter: 47.8%
Monthly Dividend per Share: 13.66 cents
SLR Investment Corp. (NASDAQ:SLRC) is a New York-based publicly listed business development company (BDC) that invests in the debt and equity of middle-market companies in the United States.
The company primarily invests in senior secured loans, mezzanine debt, and equity securities of privately-held companies with annual revenues between $50 million and $500 million. SLR Investment Corp. (NASDAQ:SLRC) targets companies across a wide range of industries, including healthcare, technology, consumer products, and business services. The investment process of SLR Investment Corp. (NASDAQ:SLRC) involves performing thorough due diligence and underwriting to identify companies with attractive investment opportunities.
SLR Investment Corp. reported a net asset value (NAV) per share of $18.33 in Q4 2022. The company achieved a record level of originations in 2022, totaling $1.3 billion, with more than 90% of net originations coming from its specialized financial investment strategies. The comprehensive portfolio of SLRC is allocated to asset-based lending and specialty finance investments, with approximately 78% of the portfolio invested in senior secured loans supported by borrowing bases and full covenant structures. According to Michael Gross, co-CEO of the company, this mix of assets is defensive against economic downturns while providing opportunities to allocate capital in 2023 across various strategies.
7. Ellington Residential Mortgage REIT (NYSE:EARN)
YoY Revenue Growth for the Most Recent Reported Quarter: 72.7%
Monthly Dividend per Share: 8 cents
Ellington Residential Mortgage REIT (NYSE:EARN) is an Old Greenwich, Connecticut-based publicly listed REIT founded in 2012. The company went public in 2013.
Ellington Residential Mortgage REIT (NYSE:EARN) invests primarily in RMBS, which are pools of mortgages that are sold to investors as bonds. The company’s portfolio includes both agency RMBS, which are backed by the government-sponsored enterprises Fannie Mae, Freddie Mac, and Ginnie Mae, as well as non-agency RMBS, which are not backed by the government and may carry higher credit risk. The company’s investments are managed by Ellington Management Group, which is a registered investment adviser and an affiliate of the REIT.
6. Sabine Royalty Trust (NYSE:SBR)
YoY Revenue Growth for the Most Recent Reported Quarter: 175%
Monthly Dividend per Share: 63.73 cents
Sabine Royalty Trust (NYSE:SBR) is a Dallas, Texas-based publicly-traded trust that owns a net profit interest in certain oil and gas properties located in Texas, Louisiana, and Mississippi. The trust was established in 1982 and was created as a result of the merger between Sabine Corporation and Royalty Company of America.
As a net profits interest holder, Sabine Royalty Trust receives a percentage of the proceeds from the sale of oil, gas, and other minerals produced from the underlying properties. The trust does not engage in exploration or production activities but rather receives royalties from the operating companies that hold the mineral leases. Sabine Royalty Trust (NYSE:SBR) has diversified interests in over 50,000 acres of land. As of December 31, 2021, the company had estimated proven reserves of 39.7 million barrels of oil equivalent, with a PV-10 value of approximately $291.3 million.
Horizon Asset Management was the leading hedge fund investor in Sabine Royalty Trust (NYSE:SBR) during the fourth quarter of 2022.
In addition to Sabine Royalty Trust (NYSE:SBR), Permian Basin Royalty Trust (NYSE:PBT), Dynex Capital, Inc. (NYSE:DX), and Mesa Royalty Trust (NYSE:MTR) are also some of the high-growth monthly dividend stocks to buy.
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Disclosure: None. 11 High Growth Monthly Dividend Stocks to Buy is originally published on Insider Monkey.