Investing in quality companies that pay you a dividend is one of the most popular forms of creating long-term wealth. Investment moguls including Warren Buffet are a huge fan of dividend-paying companies. These entities generally derive stable cash flows allowing them to maintain and even increase these payouts over time.
While most companies pay dividends each quarter, a few companies have a monthly payout. Here, we look at three such stocks that you should consider right now.
The first company on the list is Gladstone Investment (NASDAQ: GAIN) which is a business development company. Gladstone is a private equity fund that specializes in the lower middle market, acquisitions as well as buyouts. It is also involved in recapitalizations, debt refinancing, and credit lines.
The fund does not invest in start-ups and allocates capital companies in the manufacturing, consumer products, and distribution sectors. Gladstone invests in small and medium enterprises in the U.S. and generally invests via debt and equity capital. It looks to invest in companies that have an EBITDA between $3 million and $20 million.
Gladstone increased dividends by 2.94% last January to $0.07 per month, indicating a forward yield of 6.7%, and it has not trimmed its payouts since 2009. The company has a diversified customer base which mitigates its risk significantly.
In the last five years, Gladstone stock has gained an impressive 95.8%.
When you talk about monthly dividend-paying companies it is difficult to ignore Realty Income (NYSE: O), a REIT which has increased dividends for 93 consecutive quarters. It is now a Dividend Aristocrat and has also seen its stock price increase by 57% in the last five years.
Ever since Realty Income stock went public back in 1994, it has returned 15.3% annually compared to the S&P 500 returns of 10.4%. Realty Income has also outpaced the tech-heavy NASDAQ which has risen 11.4% annually in this period. Despite its stellar returns, Realty Income pays an annual dividend of $2.82 per share indicating a forward yield of 4.3%.
It is one of the largest REITs in the world with a portfolio of 6,500 properties. Its tenants include investment-grade companies such as Walgreen Boots Alliance (NASDAQ: WBA), CVS Health (NYSE: CVS), Dollar General (NYSE: DG), Walmart (NYSE: WMT), and FedEx (NYSE: FDX). In Q4, Realty Income collected 93.6% of its contractual rents.
Stag Industrial (NYSE: STAG) is a real estate investment trust that is part of the industrial real estate space. The company pays a monthly dividend of $0.120833 per share or $1.45 per year, indicating a tasty forward yield of 4.2% given its stock price of $34.42. Stag Industrial shares have gained 68% in the last five years.
The company’s tenants include Amazon (NASDAQ: AMZN), Ford (NYSE: F), and several big-ticket names. During its investor presentation, Stag confirmed that at least 60% of its tenants generate over $1 billion in annual sales.
In 2020, its net income was up 349% year over year at $196.7 million. Its core funds from operations rose 21.6% to $288.7 million. Several commercial industrial REITs including Stag have exposure to the high-growth e-commerce vertical that has grown at an astonishing rate amid the pandemic.
This allowed Stag to report an occupancy rate of 96.9% on its total portfolio. The REIT collected rent on 99.6% of these properties for the year ended in 2020.
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