Using our data, we have compiled a list of the 10 best monthly dividend stocks with 5+% yield. In fact, there are just over 30 companies that pay monthly dividends. Generally companies pay quarterly dividends, with some paying annual or even biannual dividends. Paying quarterly dividends doesn’t require companies to keep an eye on their cash flow every month, but rather issue dividends alongside their regularly-scheduled financial reports. On the other hand, for companies that pay monthly dividends, such an arrangement is easier, mainly because it is aligned with their business.
Most companies that pay monthly dividends are real estate investment trusts, which conduct their operations (collect rent, mortgage payments, etc.) on a month-by-month basis. Investing in stocks that pay monthly dividends is a simple way to generate cash flow for people who rely on their portfolios for income, such as retirees. In addition, more frequent dividend payouts allows investors to compound their returns more frequently, which results in better returns over the long-run. However, monthly dividend stocks also carry some risks that should not be overlooked.
Since the majority of companies that pay their dividends each month are REITs and MLPs, they also have very high yields, because all or most of their income is paid out as dividends. On the one hand this is a good thing, because monthly dividend payouts suggests that management is shareholder-friendly and is confident that cash flow is strong enough to sustain the dividends.
Without any further ado, let’s take a closer look at the 10 best monthly dividend stocks with 5+% yield.