There are 2,548 stocks with a billion-dollar market cap or more in today's stock market, according to Finviz. Fully 1,476 of them pay dividends with an average annual yield of 3%. Most of those dividend payments are paid on a quarterly basis. Others send those checks once or twice a year.
And a handful process their dividend payouts every months. Based on data from Simply Safe Dividends, we're down to a tiny group here. The thousands of fairly large dividend payers we started with are down to just 15 names now:
Company | Ticker | Industry | Market Cap (Billions) | Dividend Yield |
|---|---|---|---|---|
Realty Income | (NYSE: O) | REIT -- Retail | $42.9 | 4.9% |
Shaw Communications | (NYSE: SJR) | Telecom Services | $14.3 | 3.1% |
Agree Realty | (NYSE: ADC) | REIT -- Retail | $6.4 | 4.2% |
AGNC Investment | (NASDAQ: AGNC) | REIT -- Mortgage | $6.0 | 14.5% |
Stag Industrial | (NYSE: STAG) | REIT -- Industrial | $5.9 | 4.6% |
Phillips Edison & Company | (NASDAQ: PECO) | REIT -- Retail | $3.9 | 3.6% |
Apple Hospitality REIT | (NYSE: APLE) | REIT -- Hotel & Motel | $3.6 | 6.3% |
Main Street Capital | (NYSE: MAIN) | Asset Management | $3.1 | 7.1% |
EPR Properties | (NYSE: EPR) | REIT -- Specialty | $3.0 | 8.6% |
Prospect Capital | (NASDAQ: PSEC) | Asset Management | $2.7 | 10.8% |
SL Green Realty | (NYSE: SLG) | REIT -- Office | $2.0 | 11.2% |
LTC Properties | (NYSE: LTC) | REIT -- Healthcare | $1.4 | 6.7% |
Permian Basin Royalty Trust | (NYSE: PBT) | Oil & Gas Midstream | $1.1 | 5.1% |
Sabine Royalty Trust | (NYSE: SBR) | Oil & Gas E&P | $1.1 | 11.9% |
ARMOUR Residential REIT | (NYSE: ARR) | REIT -- Mortgage | $1.0 | 18.8% |
Data sources: Finviz and Simply Safe Dividends.
Take extra care before putting real money into the more extreme dividend yields, since double-digit percentages in this category rarely are sustainable in the long run. So I'm not saying all of these stocks are great buys or fantastic dividend payers, but the list should be a good starting point for further research.
Common themes
Here's a bird's-eye overview of the 15 month-by-month dividend payers I found with market caps of at least $1 billion:
- Ten of these companies are organized as real estate investment trusts (REITs). They enjoy lower tax rates in exchange for running a real estate-based business and paying out dividends covering at least 90% of their taxable income.
- Nearly all of these companies are headquartered in the U.S., except for the Canadian telecom Shaw Communications.
- Most of these businesses are relatively small, with the notable exceptions of Shaw's $14.2 billion market cap and a $41.9 billion valuation for Realty Income Corporation. Realty Income is even a component of the S&P 500 index.
- More than half of these companies have paid dividends since the 1990s. However, most are not as committed to annual dividend increases as the typical payer on a quarterly schedule. The payout amounts often vary from month to month, and more than two-thirds of this group have decreased their dividend payments over the past decade.
The ups and downs of monthly payouts
There are some downsides to monthly dividend checks.
First, very few stocks pay monthly dividends, so you'll have fewer options to choose from when building your portfolio. Second, many of these stocks may have limited growth potential, as they're often mature companies that prioritize paying out dividends over reinvesting in their business for growth.
In addition, some monthly dividend payers, particularly those structured as REITs, may be more sensitive to changes in interest rates, which can limit their long-term profits. That's a pretty serious concern these days, since interest rates have skyrocketed over the last year.
Don't let those issues scare you, though. Monthly dividend policies have clear upsides, too.
These stocks can provide you with a steady and more frequent income stream than other dividend-paying stocks that pay quarterly, or even slower. They also often come with generous dividend yields. The 15 stocks in my study offer an average yield of 5.9%, with the caveat that some of the yields may be red flags for a flawed business structure. Be careful out there.
Finally, monthly dividend payers can be particularly attractive for retirees who rely on dividend income to fund their retirement expenses and need a reliable income stream. Convenience and dependable payout schedules can be just as important as long-term dividend growth for some investors.
So feel free to jump in and do your due diligence on some of these monthly dividend payers. Just don't fall head over heels for sky-high yields, and make sure you understand what the company actually does before smashing that "buy" button. Remember, you're managing your own hard-earned money here.
10 stocks we like better than Realty Income
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Realty Income wasn't one of them! That's right -- they think these 10 stocks are even better buys.
*Stock Advisor returns as of March 8, 2023
Anders Bylund has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Stag Industrial. The Motley Fool recommends EPR Properties and Realty Income. The Motley Fool has a disclosure policy.
