Though quarterly is the frequency at which most dividend payouts are distributed, there are a few that do so monthly. Monthly dividends may not result in a different yield but are certainly helpful in managing cash flows. These investments may be useful for people who need supplemental income to meet regular expenses, many of which are monthly, or just as extra money.
Details of two such stocks, with a track record of consistent monthly payouts, are shared here.
LTC Properties (NYSE: LTC)
The $0.19 monthly payout, one of the highest in the industry, which the company has maintained since 2016, adds up to a yield of 5.51%.
A Real Estate Investment Trust (REIT) with a portfolio of 181 investments in 27 states run by 29 different organizations and partners, LTC Properties’ primary investment is in senior housing and nursing homes through a variety of structures, including sale-leasebacks, mortgage financing, joint ventures, construction financing, and structured financing.
With a legal requirement to pay out 90% of their taxable income as dividends, REITs and BDCs (Business Development Companies) are the two types of companies that mostly populate the list of companies paying out monthly dividends.
After a rough patch in 2020 when the price was down 7.5% despite maintaining a flat revenue with higher income in the fourth quarter, it has recovered 6% this year YTD through the end of February. Though it has provided a return of only 3.3% over the last 10 years, it remains a favorite with people looking for regular dividend income. Barring 2020, its revenue growth in the last decade has been steady.
Under challenging market conditions, the company plans to continue with its underwriting standards and isn’t eyeing any major deals. Chairman and CEO Wendy Simpson said on the fourth-quarter earnings call, “When the market begins to open up, we plan to use our considerable balance sheet to provide a wide range of regional operating partners with the financing they need to help grow their businesses.”
Investors, even though they are buying the stock for the income and not return, will be happy to know of the 6.8% projected annual growth for the long-term care market over the next 6 years. LTC, as a leader in the space, stands to benefit.
Main Street Capital (NYSE: MAIN)
A monthly payout of $0.205, maintained since 2019, which is a 17% increase over the last 5 years, translates to a yield of 6.7%. With 500 shares of Main Street Capital, you will get @$102.50 as a dividend every month and $1230 annually.
Of course, paying out 90% of taxable income being a requirement for BDCs, Main Street Capital being one of the companies paying out a monthly dividend should not come as a surprise.
It has a cross-industry client list of 175 companies in its businesses of providing debt finance and equity capital to companies with annual revenues between $10 million and $150 million, and debt capital to companies with annual revenues between $150 million and $1.5 billion.
Its rigorous selection process while seeking partners with a strong management team, history of solid performance, deep industry knowledge, and competitive advantage, along with a diversified portfolio that includes financials, energy, consumer discretionary, industrials, telcos, healthcare, materials, technology, and transportation, makes it one of the sought after BDCs.
Though it lost 19% in 2020 due to the pandemic and related business issues, it has recovered some lost ground this year and moved up 13% YTD till the end of February. At a 6% annualized return over the last 10 years, it trails the S&P 500 index but continues to be favored by dividend seekers.
Earnings being relatively flat in recent years, and even dipping in 2020, should be a thing of the past as Main Street hopes to continue paying out rising dividends on the back of a favorable policy environment under the Biden administration as compared to the previous one, and the upcoming stimulus package.
If you own stock in these two companies, you can look forward to some welcome cash infusion into your account every month in the form of dividends.
