3 Monthly Dividend Stocks Yielding Up to 12.1%
These Stocks Pay You Monthly
Do you know what I hate about bonds? They only pay you twice a year.
For those of us who rely on our portfolio income to pay the bills, this can be a big headache. Not everyone can match semi-annual interest payments with monthly expenses.
Dividend stocks at least pay you every three months. Does this make cash flow a little more manageable? Sort of. Convenient? Definitely not.
Thankfully, investors can now pick from a growing universe of monthly dividend stocks. Some of these businesses are cash cows. Better still, shareholders can better sync their income and living expenses.
I’ve highlighted a few of my favorite monthly dividend stocks below.
AGNC Investment Corp
I often describe AGNC Investment Corp (NASDAQ:AGNC) as an “alternative bank.” Like a regular lender, the partnership borrows money from depositors at a low interest rate. It then invests these funds into higher-yielding mortgages. AGNC’s profit comes from the difference (the “spread”) between these two interest rates.
AGNC, however, has no physical branches. So unlike a normal bank, almost all of the partnership’s profit goes straight to the bottom line. For this reason, AGNC stock can pay out a distribution yield of 12.1%.
I suspect that this payout will keep growing. Now that the Federal Reserve has backed off from further interest rate hikes, the spread between short- and long-term rates has started to increase. That should provide a big boost in profitability in the months ahead.
San Juan Basin Royalty Trust
As investments go, decrepit oil wells don’t have the glamour of cryptocurrencies or hot tech stocks. But even though the business doesn’t make for the best topic of conversation, oil wells turn out to be pretty lucrative sources of income, often sporting double-digit annual yields. And you don’t have to be an oilman or industry insider to start cashing in.
San Juan Basin Royalty Trust (NYSE:SJT) owns a 75% interest in a collection of oil and gas wells across northwestern New Mexico. Rather than investing profits back into developing new properties, the trustee is content to milk existing operations of steady income.
Every nickel of income goes straight to unitholders. As a result, the royalty trust pays out an upfront monthly dividend of seven percent.
Those payments will decline over time as the oil wells run dry. Distributions will also fluctuate month to month due to changes in energy prices. Analysts, however, believe that the trust has enough reserves left to continue making payments for another 10 to 15 years. And that income stream could be extended if drilling technology improves.
RioCan Real Estate Investment Trust
Canada-based RioCan Real Estate Investment Trust (OTCMKTS:RIOCF, TSE:REI.UN) is pretty straightforward to wrap your head around. The partnership buys retail properties, rents them out to tenants, and pays out the profits to investors.
Today, RioCan stands as the largest landlord in the country, with 250 properties spanning some 40-million square feet.
The exciting story here is redevelopment. RioCan purchased most of its properties decades ago, back when land on the outskirts of cities was cheap. Over time, cities and towns have expanded around these buildings. Management now wants to convert much of its portfolio into office space or residential apartments.
Today, RIOCF stock pays a generous 5.7% dividend. But as management redevelops its portfolio, these cash flows will grow significantly. Executives could boost this growth rate even faster through acquisitions—assuming that management doesn’t overpay.