9 High-Yield Dividend Stocks that Pay Monthly in 2019

9 High-Yield Dividend Stocks that Pay MonthlyPosted on Monday, March 4th, 2019 by Chris Markoch

Income investors have many reasons to love dividend stocks. Most dividend stocks pay out quarterly or annually giving investors the assurance of supplemental income to offset planned expenses. For example, assume a company with a stock price of $50 pays a quarterly dividend with an annual yield of 5%. Assuming the stock price (and therefore the dividend yield) stays constant, an investor who owns 500 shares would receive $312.50 every three months or $1250 per year.

50 x 500 = 25,000 x .05 = $1,250/4 = $312.50

Stocks of companies that pay regular dividends are considered to be safe stocks. Once a company commits to a dividend it will make every effort to continue issuing that dividend. Cutting or eliminating the dividend completely would be a signal that the company is having financial problems. Yet another reason to love dividend stocks is the benefit that comes from compounding growth if dividends are reinvested over time.

All of these benefits are enhanced when investors choose dividend stocks that pay monthly dividends. In fact, in the case of compounding, investors who reinvest monthly dividends will generally see their annual returns grow significantly. And, although dividend stocks, in general, are less volatile than non-dividend stocks, stocks that pay monthly dividends are generally even less volatile, which can be attractive to investors with a low-risk tolerance.

What companies pay out a monthly dividend? As you might expect, utility stocks are represented. These stocks commonly pay dividends and pay them monthly. Another kind of monthly dividend stock that you’ll see heavily represented in this presentation is a Real Estate Investment Trust (REIT). REIT’s collect rent every month. By law, they are required to pay out a minimum of 90% of their taxable income as dividends. Therefore, paying dividends monthly gives them better control of their tax liabilities.

#1 - Realty Income (NYSE:O)

Realty Income logo

Realty Income (NYSE: O)Current dividend yield: 3.93% -The first of the REIT’s that we’ll focus on is Realty Income and with good reason. The company has been increasing their dividends for over 25 consecutive years, putting them in the elite Dividend Aristocrat club. Plus, unlike the vast majority of REITs, Realty Income has been able to maintain an “A” or higher credit rating. The stock has been on a tear. Year-over-year, share price has shown an increase of 27% including a gain of just over 10% since the start of 2019. These would be important metrics for any stock, but they are particularly significant for a retail REIT. About 80% of their portfolio is from retail tenants. However, a high percentage of the company’s holdings are in stocks of drug stores and dollar store chains that offer consumer necessities at prices that are competitive with e-commerce. Plus, Realty Income is slightly different than other retail REITs in that about 20% of its portfolio is in non-retail spaces such as offices and industrial properties. This gives the stock an added dimension of diversification. In fact, company estimates project that 94% of its portfolio income is protected against both e-commerce and recessions.

About Realty Income
Realty Income, The Monthly Dividend Company, is an S&P 500 company dedicated to providing stockholders with dependable monthly income. The company is structured as a REIT, and its monthly dividends are supported by the cash flow from over 5,700 real estate properties owned under long-term lease agreements with regional and national commercial tenants. To date, the company has declared 584 consecutive common stock monthly dividends throughout its 50-year operating history and increased the dividend 100 times since Realty Income's public listing in 1994 (NYSE: O).

Current Price: $73.28
Consensus Rating: Hold
Ratings Breakdown: 4 Buy Ratings, 5 Hold Ratings, 1 Sell Ratings.
Consensus Price Target: $59.80 (-18.4% Upside)

#2 - Apple Hospitality REIT (NYSE:APLE)

Apple Hospitality REIT logo

Apple Hospitality REIT (NYSE: APLE)Current dividend yield: 7.33% - Another REIT that’s worth a closer look is the Apple Hospitality REIT. As its name implies, this trust focuses on the hotel industry and is one of the industry’s largest owners of select-service and extended-stay hotels. However, its holdings are made up of only two hotel chains: Hilton and Marriott and it is in the top five of Hilton and Marriott owners in the United States. The REIT, which has a market cap of $3.66 billion, focuses its 241 acquisitions on business travelers in 34 states with particular attention paid to markets such as Los Angeles, San Diego, Atlanta, Dallas, and Nashville. Since 2015, the year APLE became publicly traded, it has generated a steady monthly dividend that is easily covered by a healthy fund from operations (FPO) that was at 89 cents for the first half of 2018. The stock is up over 13% for the year.

About Apple Hospitality REIT
Apple Hospitality REIT, Inc. (NYSE: APLE) is a publicly traded real estate investment trust (REIT) that owns one of the largest and most diverse portfolios of upscale, select-service hotels in the United States. Apple Hospitality's portfolio consists of 241 hotels with more than 30,700 guest rooms located in 88 markets throughout 34 states. Franchised with industry-leading brands, the Company's portfolio comprises 115 Marriott-branded hotels and 126 Hilton-branded hotels.

Current Price: $16.03
Consensus Rating: Buy
Ratings Breakdown: 1 Buy Ratings, 1 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: $19.00 (18.5% Upside)

#3 - Global Net Lease (NYSE:GNL)

Global Net Lease logo

Global Net Lease (NYSE: GNL)Current dividend yield: 11.70% - For sheer dividend yield, it’s hard to beat Global Net Lease. The company sports a $1.38 billion market cap and an 11.70% dividend yield. But with that reward comes an increased risk. For GNL that risk is a bit of inconsistent growth. In 2017, for example, the company reported a decline of 18% in Funds from operation (FFO) per share. However, overall FFO rose. In 2019, the stock price has been on a bit of a roller coaster. At one point, share price was up over 13%, but has since declined and while still positive for the year is sitting at a growth of just 3% for the year. The dividend payout ratio has been around 97% since 2018. The company has been issuing dividends since 2012 with the last rate increase occurring in 2015. Offsetting that risk somewhat is a portfolio that is heavy in both office (56%) and industrial (35%) tenants. Only 9% of the company’s portfolio has exposure to the retail sector.

About Global Net Lease
Global Net Lease, Inc. (NYSE: GNL) is a publicly traded real estate investment trust listed on the NYSE focused on acquiring a diversified global portfolio of commercial properties, with an emphasis on sale-leaseback transactions involving single tenant, mission critical income producing net-leased assets across the United States, Western and Northern Europe.

Current Price: $18.55
Consensus Rating: Hold
Ratings Breakdown: 1 Buy Ratings, 2 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: $24.00 (29.4% Upside)

#4 - Vermilion Energy (NYSE:VET)

Vermilion Energy logo

Vermilion Energy (NYSE: VET) Current dividend yield: 8.21% - Utility companies are known to be good dividend stocks and when they pay out dividends monthly, all the better. Such is the case with the Canadian oil and gas provider, Vermilion Energy (VET). When considering investing in VET, investors should look beyond their dividend yield of just over eight percent and focus on where the utility’s assets are located. In North America, their assets make up 60% of the production and solid footholds in the Wyoming Powder River Basin and Canada’s gas-rich Manville play. In Australia, the company has two permanently manned off-shore platforms in the Wandoo field. And in Europe, the company receives premium pricing from its gas fields. The company also acquired Spartan Energy, a Saskatchewan oil producer in 2017. The company’s stock has been drawing recent interest from hedge funds and institutional investors –a bullish signal for investors. As confirmation of that signal, VET’s stock had a consensus BUY rating from analysts (as of March 1, 2019) with a target stock price of $40.50.

About Vermilion Energy
Vermilion Energy Inc. acquires, explores, develops, and produces petroleum and natural gas in Canada, France, the Netherlands, Germany, Ireland, Australia, the United States, and Central and Eastern Europe. It owns 80% interest in 544,500 net acres of developed land and 87% interest in 439,800 net acres of undeveloped land, and 397 net producing natural gas wells and 3,346 net producing oil wells; and 96% interest in 248,900 net acres of developed land and 92% interest in 251,800 net acres of undeveloped land in the Aquitaine and Paris Basins, and 337 net producing oil wells and 2 net producing gas wells. The company also owns 48% interest in 930,000 net acres of land and 103 net producing gas wells; 32,600 net acres of developed and 1,149,400 net acres of undeveloped land, and 105 net producing oil wells and 8 net producing natural gas wells; and 148,700 net acres of land and 118 net producing oil wells. In addition, it owns 20% interest in the offshore Corrib gas field; and 60% interest in the Wandoo field comprises 59,600 acres; and lands of 652,800 net acres, 242,500 net acres, and 2.35 million net acres. Further, the company has 181,664 barrels of oil equivalent (Mboe) of gross proved reserves and 284,476 Mboe of gross proved plus probable reserves; 43,466 Mboe of gross proved reserves and 63,918 Mboe of gross proved plus probable reserves; 11,802 Mboe of gross proved reserves and 22,196 Mboe of gross proved plus probable reserves; 12,991 Mboe of gross proved reserves and 25,735 Mboe of gross proved plus probable reserves; 13,093 Mboe of gross proved reserves and 20,575 Mboe of gross proved plus probable reserves; 9,668 Mboe of gross proved reserves and 14,480 Mboe of gross proved plus probable reserves; 25,147 Mboe of gross proved reserves and 56,214 Mboe of gross proved plus probable reserves; and 131 Mboe of gross proved reserves and 191 Mboe of gross proved plus probable reserves. The company was founded in 1994 and is headquartered in Calgary, Canada.

Current Price: $24.83
Consensus Rating: Buy
Ratings Breakdown: 5 Buy Ratings, 2 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: $40.50 (63.1% Upside)

#5 - Pembina Pipeline Corporation (NYSE:PBA)

Pembina Pipeline logo

Pembina Pipeline Corporation (NYSE: PBA)Current dividend yield: 4.70% - Pembina Pipeline Corporation is a behemoth in the North American energy market with a market capitalization of over $25 billion. In 2017, it completed the largest acquisition in its history by making a $7.1 billion purchase of its rival Veresen. Since 2010, the company has increased its daily production volume by 169% and increased its cash dividends by 50% while still maintaining a manageable payout ratio between 55-60%. However, when looking at dividend stocks like PBA, it’s fair to ask about the future. For Pembina, that future looks exceptionally bright with a number of projects slated to be game changers for the company and the stock. One of the most prominent of these is the decision to move forward with the construction of an integrated petrochemical facility in Canada. When constructed, this facility will convert propane into polypropylene – a move that will position Pembina further downstream in the oil and gas value chain. The stock is up nearly 17% in 2019.

About Pembina Pipeline
Pembina Pipeline Corporation provides transportation and midstream services for the energy industry in North America. It operates through three divisions: Pipelines, Facilities, and Marketing & New Ventures. The company operates approximately 10,000 kilometers of pipeline network that transports hydrocarbon liquids and extends across Alberta and parts of British Columbia, Saskatchewan, and North Dakota; and owns and operates the Nipisi and Mitsue pipelines, which provide transportation for producers operating in the Pelican Lake and Peace River heavy oil regions of Alberta; transports synthetic crude oil for the Syncrude project and the Horizon project to delivery points near Edmonton, Alberta; and operates Cheecham Lateral, which transports synthetic crude to oil sands producers operating southeast of Fort McMurray, Alberta. Its Oil Sands & Heavy Oil business operates approximately 1,650 kilometers of pipeline and has 1,060 thousands of barrels per day of capacity. In addition, the company provides natural gas gathering, compression, condensate stabilization, and shallow and deep cut processing services. Further, its NGL Midstream business offers products and services, including storage, terminalling, and hub services through 14 truck terminals; 21 inbound and 13 outbound pipeline connections; 1.2 mmbpd of crude oil and condensate supply; and approximately 900 mbbls of ground storage in the Edmonton North Terminal, as well as 2 NGL operating systems. Additionally, the company offers tariff-based operations of pipelines and related facilities; natural gas gathering and processing facilities; NGL fractionation facility and gas processing capacity near Chicago, Illinois; and other natural gas and NGL processing facilities, logistics, and distribution assets in the United States and Canada. Pembina Pipeline Corporation was founded in 1997 and is headquartered in Calgary, Canada.

Current Price: $36.42
Consensus Rating: Buy
Ratings Breakdown: 7 Buy Ratings, 0 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: N/A

#6 - Global X Super Dividend U.S. ETF (NYSEARCA:DIV)

Global SuperDividend US ETF logo

Global X Super Dividend U.S. ETF (NYSEArca: DIV)Current dividend yield: 7.82% - Exchange-traded funds (ETFs) continue to grow in popularity and one fund that has an extremely attractive yield along with a stellar track record of growth is the Global X Super Dividend U.S. ETF. This ETF is built for safety with a portfolio that’s spread among the consumer defensive, cyclical, utility, real estate, and energy sectors. And although it has some attractive names such as Exxon Mobil among its top holdings, no stock is more than 3% of their portfolio. Morningstar gives it a “low risk” rating. Since its inception in 2013, it has delivered a solid return of 7% per year. The stock price has been steadily rising in 2019 and is sitting on about a 7% gain as of March 4. In addition to a dividend that has been steadily growing (it was around 6% in 2018), the fund has a low 0.45% expense ratio.

About Global SuperDividend US ETF

Current Price: $23.60
Consensus Rating: N/A
Ratings Breakdown: 0 Buy Ratings, 0 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: N/A

#7 - Invesco KBW High Dividend Yield Financial Portfolio ETF (NASDAQ:KBWD)

Invesco KBW High Dividend Yield Financial ETF logo

Invesco KBW High Dividend Yield Financial Portfolio ETF (NASDAQ: KBWD) - Current dividend yield: 8.58% - Another ETF that offers an exceptional yield is this fund from Invesco. KBWD has a very small number of holdings that are heavily concentrated in mortgage REIT’s. However no one single asset makes up more than 6% of its portfolio.  Over 90% of the fund’s assets are in banking, insurance and financial services stocks. The fund offers stable management. Since launching in 2010, the fund has been run by the same fund managers, which is not always the case with an ETF. Investors may get scared off by an expense ratio of 2.4%. However this number is due, in large part, to the requirement that the fund include the operating expenses of private equity holdings in that ratio. Its net expense ratio is a much more palatable 0.35%. The stock price is currently up over 9% for the year and the dividend is up from 8.4% last year to its current level of just above 8.5%. 

About Invesco KBW High Dividend Yield Financial ETF

Current Price: $21.35
Consensus Rating: N/A
Ratings Breakdown: 0 Buy Ratings, 0 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: N/A

#8 - Main Street Capital (NYSE:MAIN)

Main Street Capital logo

Main Street Capital (NYSE: MAIN) - Current dividend yield: 6.27% - Other than utilities and REITs another popular sector to find attractive monthly dividend stocks is in Business Development Corporations (BDCs). With over $4 billion currently under management, Main Street Capital is one of the major players.  MAIN is a great source of dividend safety having never cut its dividend, which is one of the concerns that investors have when investing in a BDC. MAIN has taken a conservative approach by issuing a special dividend twice a year. However, in November, 2018 the company announced plans to phase out that dividend over the next five years and will roll it into their normal monthly dividend. This will make the already attractive company that much more attractive. BDCs in general have been outperforming the S&P 500 in 2019 and Main Street Capital is no exception reporting a current gain of over 10.5% YTD. The company has seen its income rise in 12 of the last 13 years, including a 16% growth rate in the five years ending in 2017.

About Main Street Capital
Main Street Capital Corporation is a business development company specializing in long- term equity and debt investments in small and lower middle market companies. The firm focuses on investments in, subordinated loans, private equity, venture debt, mezzanine investments, mature, mid venture, industry consolidation, later stage, late venture, emerging growth, management buyouts, change of control transactions, ownership transitions, recapitalizations, strategic acquisitions, refinancing, business expansion capital, growth financings, family estate planning, and other growth initiatives primarily for later stage businesses. It invests in consumer discretionary, consumer staples, energy, healthcare, industrials, information technology, manufacturing, media, materials, telecommunication services, and utilities sectors. It does not seek to invest in start-up companies or companies with speculative business plans. It seeks to invest in traditional or basic businesses. The firm primarily invests in companies based in the Southern, South Central, and Southwestern regions of the United States but also considers other domestic investment opportunities. It typically invests between $2 million and $75 million in equity and $5 million to $50 million in debt, revenue between $10 million and $150 million, enterprise value between $3 million and $50 million, and EBITDA between $1 million and $20 million. The firm seeks to charge a fixed interest rate between 12 percent and 14 percent, payable in cash, in case of its mezzanine loan investments. The firm typically invests in the form of term debt with equity participation and/or direct equity investments. It prefers to maintain fully diluted minority and majority equity positions in its portfolio companies of 5 percent to 50 percent, and may have controlling interests in some instances. The firm also co-invests with other investment firms. It seeks to exit its debt investments through the repayment of the investment from internally generated cash flow and/or refinancing within a period of three to seven years. It participates in warrants, PIK (Payment in Kind) interest, convertible securities, junior secured or unsecured, senior secured debt, unitranche debt, equity related, common equity, and preferred equity. Main Street Capital Corporation was incorporated on March 9, 2007 and is based at Houston, Texas.

Current Price: $37.41
Consensus Rating: Hold
Ratings Breakdown: 2 Buy Ratings, 3 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: $38.80 (3.7% Upside)

#9 - Shaw Communications (TSE:SJR)

Shaw Communications logo

Shaw Communications (TSE: SJR) - Current dividend yield: 4.36% - Shaw Communications is Canada’s fourth largest provider of wireless services, which is impressive when you consider that they only entered the sector in 2016. The business model for SJR includes low-cost data packages, an upgraded network and heavy retail distribution which has seen their subscriber base climb to over seven million in 2018. In 2018, the company began marketing its products at over 100 Loblaws grocery stores.  By early 2019, the company expects to be available in over 600 retail locations including 140 Wal-Mart stores. Shaw has posted an average dividend growth of 5% over the five years ending in 2017 and currently has a dividend payout of around 8 cents per share. In February, Shaw received a consensus Buy rating from analysts with a price target of $30.65. That would be an increase of over 11.5% from its current level of $27.12. The company’s stock is up just over 8.5% YTD.

About Shaw Communications

Current Price: $0.00
Consensus Rating: Buy
Ratings Breakdown: 2 Buy Ratings, 0 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: N/A

There are a number of benefits to monthly dividend-paying stocks. One of the most attractive for investors is the ability to compound their income more rapidly than what they can do, even from stocks that pay quarterly dividends. But like any dividend stock, investors need to be careful not to focus only on high yield. Attractive yields are frequently unsustainable. Better metrics to look for are a proven history of not only maintaining but increasing their dividend as well as a realistic valuation.

The number of companies that pay monthly dividends is in the hundreds. However, investors looking for stocks that pay monthly dividends will find the majority to be part of a real estate investment trust (REIT) or a closed-end fund. Investors will also find some attractive companies in the utilities sector. All of these sectors come with some risk. For example, REITs frequently have exposure to volatile sectors like retail stores. Closed-end funds pose risks due to the use of financial leverage in building their portfolio.

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