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Updated: January 25, 2023

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8 best dividend stocks for income investors

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Updated: January 25, 2023

We adhere to strict standards of editorial integrity to help you make decisions with confidence. Please be aware that some (or all) products and services linked in this article are from our sponsors.

We adhere to strict standards of editorial integrity to help you make decisions with confidence. Please be aware that some (or all) products and services linked in this article are from our sponsors.

Prices updated as of Jan. 25, 2023

Investing in regular stocks is a good strategy for an investor looking to capitalize on long-term growth in a company, while dividend stocks also provide a regular source of cash flow. This cash flow can be used to support your cost of living in retirement or to reinvest into your portfolio. This article will highlight some of the best monthly dividend stocks to capitalize on both long-term appreciation and short-term cash flow.

Stock
Ticker
TL;DR
Gladstone Commercial Corporation
GOOD
REIT that invests in single-tenant or multi-tenant net leased industrial and office properties.
Ellington Financial Inc.
EFC
Ellington Financial Inc.
Agree Realty Corp.
ADC
REIT that focuses on essential retail properties such as grocery stores, big box retailers, home improvement stores, and drug stores.
LTC Properties Inc.
LTC
REIT that finances senior housing and healthcare properties.
AGNC Investment Corp
AGNC
REIT that buys government-backed mortgages and mortgage-backed securities.
EPR Properties
EPR
Experiential REIT that invests in long-term leases at properties like movie theaters, museums, and ski resorts.
Pembina Pipeline Corporation
PBA
Canadian energy transportation and midstream provider that owns pipelines and facilities that process oil and natural gas
Prospect Capital Corp.
PSEC
Business development company that provides capital to middle market businesses.

AGNC Investment Corp. (AGNC)

  • Current price: $10.50
  • 12-month high: $12.78
  • 12-month low: $7.74
  • 1-year target: $10.53
  • Market capitalization: $6.335 billion

AGNC Investment Corp. is a real estate investment trust or REIT. Many high dividend stocks are REITs. In exchange for distributing 90% of their taxable to investors, REITs earn certain tax benefits. Because they’re required to pay dividends, REITs are a dependable and reliable source of cash flow.

AGNC buys mortgage-related securities guaranteed by government-sponsored enterprises like Fannie Mae. Government backing makes these securities less riskier than other types of financing options. AGNC investors benefit from a 14.37% dividend yield which pays $0.12 per share each month.

Related: How to invest in dividend stocks

Ellington Financial Inc. (EFC)

  • Current price: $13.97
  • 12-month high: $16.05
  • 12-month low: $10.83
  • 1-year target: $14.34
  • Market capitalization: $939.592 million

Ellington Financial Inc. is another mortgage REIT that invests in residential and commercial loans and securities. These include a variety of investments ranging from collateralized loans to mortgage-backed securities. They have $10.3 billion assets under management. Ellington has a 12.82% dividend yield and pays $0.15 per share per month.

Prospect Capital Corp. (PSEC)

  • Current price: $6.57
  • 12-month high: $8.13
  • 12-month low: $6.08
  • 1-year target: $5.75
  • Market capitalization: $2.642 billion

Prospect Capital Corp. is a business development company that provides capital to middle market businesses. They’ve invested in assets totaling $7.7 billion with $3.8 billion in declared dividends. Prospect Capital has a 9.21% dividend yield which pays $0.06 per share each month.

Related: How to receive a steady income with dividends

EPR Properties (EPR)

  • Current price: $44.56
  • 12-month high: $55.36
  • 12-month low: $35.29
  • 1-year target: $49.28
  • Market capitalization: $3.354 billion

EPR Properties is an experiential REIT. They invest in long-term leases at properties like movie theaters, museums, and ski resorts. Triple-net leases mean the tenants are responsible for property upkeep rather than EPR. Instead of paying for things like real estate taxes, insurance, and building maintenance, EPR passes it onto the tenant and the cost savings onto the investor. To date, EPR has made $6.6 billion in investments across 356 different properties. EPR has an 8.01% dividend yield that pays $0.275 per share per month.

LTC Properties Inc. (LTC)

  • Current price: $35.58
  • 12-month high: $44.95
  • 12-month low: $31.22
  • 1-year target: $34.20
  • Market capitalization: $1.473 billion

LTC Properties is a REIT that finances senior housing and healthcare properties. Approximately 50% of LTC’s portfolio is senior housing while the other 50% is skilled nursing facilities. They provide investments through sale-leasebacks, mortgages, construction, and joint ventures. LTC has a 5.9% dividend yield and pays a dividend of $0.19 per share each month.

Agree Realty Corp. (ADC)

  • Current price: $68.98
  • 12-month high: $79.59
  • 12-month low: $63.49
  • 1-year target: $75.62
  • Market capitalization: $6.453 billion

Agree Realty Corp. is a REIT that focuses on essential retail properties such as grocery stores, big box retailers, home improvement stores, and drug stores. These properties are secured with triple-net leases. Agree Realty operates 1,707 properties across the United States. They increased their monthly dividend payment in October 2022. In 2021 Agree switched from quarterly dividend payments to monthly. They now pay $0.24 per share each month, up from $0.234 per share paid out earlier in 2022. Their dividend yield is currently at 4.21%.

Gladstone Commercial Corporation (GOOD)

  • Current price: $13.50
  • 12-month high: $20.95
  • 12-month low: $11.27
  • 1-year target: $19.50
  • Market capitalization: $550.764 million

Gladstone Commercial Corporation is a REIT that invests in single-tenant or multi-tenant net leased industrial and office properties. With net leased properties some of the property fees – like real estate taxes – are passed onto the tenants. Gladstone’s investment strategy prioritizes properties in good locations with strong underlying land value. They currently operate in 27 states. Gladstone pays out a monthly dividend of $0.1254 per share and has a yield of 8.004%.

Pembina Pipeline Corporation (PBA)

  • Current price: $31.40
  • 12-month high: $38.18
  • 12-month low: $30.16
  • 1-year target: $38.12
  • Market capitalization: $217.282 billion

Pembina Pipeline Corporation is a Canadian energy transportation and midstream provider. They own pipelines and facilities that process oil and natural gas for distribution across North America. Pembina pays a monthly dividend of $0.2175 CAD per share and has a yield rate of 5.51%.

Other ways to invest in high dividend stocks

Instead of investing in individual high dividend stocks, you can invest in a dividend exchange-traded fund – or ETF – like the Vanguard Real Estate Index Fund ETF (VNQ). This ETF is composed of a number of REITs across a variety of sectors including residential, healthcare, industrial, and hotels and resorts.

When you buy a share of an ETF you are buying into a basket of different REITs. These ETFs typically pay a quarterly dividend that might be even higher than investing in an individual REIT. There is a trade-off though: REIT ETFs come fees. VNQ, for example, has an expense ratio of 0.12%.

Bonds can also be a high dividend yield investment option. Similarly, you can invest in a bond ETF. The Vanguard Total Bond Market ETF (BND) pays a monthly dividend of about $0.16 per share with an expense ratio of 0.03%. If you prefer mutual funds, there is an equivalent mutual fund for bonds as well.

Should you invest in monthly dividend stocks?

Dividend stocks are a great way for investors to generate passive income. REITs in particular are good passive income generators because they are required to pay out a portion of their revenue to investors. Most of these payments are made in the form of monthly dividends that can be reinvested to grow your portfolio faster than other types of dividend stocks.

One downside to investing in monthly dividend stocks is that the stocks with the highest dividends tend to be concentrated in real estate. Thanks to growth in e-commerce and remote working, a shift in commercial real estate is currently underway. While this hasn’t led to a decrease in dividends posted by many of the REITs listed above, that could change in the near future.

Other assets, like energy infrastructure, are also at risk because of shifting consumer and regulatory expectations around fossil fuels. A move toward a low-carbon economy could result in assets being stranded. While REITs are good for generating monthly income, their long-term viability in certain sectors of the economy is uncertain.

Related: Dividend Aristocrats List

Bottom line

Stocks that pay high dividends are a good passive income generator. These stocks put your money to work and help you recuperate your return on investment much quicker than regular equity stocks. The dividends you earn can be used to reinvest or to fund your cost of living.

The best place to find high dividend paying stocks is REITs. These are real estate companies that are required to pay dividends to their investors. This means even when the economy takes a downturn you can still expect to still generate income from these stocks.

About our author

Amanda Claypool
Amanda Claypool, Freelance Contributor

Amanda Claypool is a writer, entrepreneur, and digital nomad. She writes about wealth, blockchain technology, consumerism, and the future of work. She is a digital nomad currently based in Asheville, NC, and shares about her life on the road over on Substack. In her free time, she enjoys hiking, reading, and spending way too much time in local coffee shops.

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